DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
Exhibit 10.4
This Director and Officer Indemnification Agreement, dated as of ,
(this “Agreement”), is made by and between Xxxx Holding Corporation, a Delaware corporation (the
“Company”), and (“Indemnitee”).
RECITALS:
A. The Delaware courts have recognized that indemnification by a corporation serves the dual
policies of (1) allowing corporate officials to resist unjustified lawsuits, secure in the
knowledge that, if vindicated, the corporation will bear the expense of litigation and
(2) encouraging capable women and men to serve as corporate directors and officers, secure in the
knowledge that the corporation will absorb the costs of defending their honesty and integrity.
B. Indemnitee is a director and/or officer of the Company and his/her willingness to serve in
such capacity is predicated, in substantial part, upon the Company’s willingness to indemnify
him/her in accordance with the principles reflected above, to the fullest extent permitted by the
laws of the state of Delaware, and upon the other undertakings set forth in this Agreement.
C. Therefore, in recognition of the need to provide Indemnitee with substantial protection
against personal liability, in order to procure Indemnitee’s continued service as a director and/or
officer of the Company and to enhance Indemnitee’s ability to serve the Company in an effective
manner, and in order to provide such protection pursuant to express contract rights (intended to be
enforceable irrespective of, among other things, any amendment to the Company’s certificate of
incorporation or bylaws (collectively, the “Constituent Documents”), any change in the composition
of the Company’s Board of Directors (the “Board”) or any change-in-control or business combination
transaction relating to the Company), the Company wishes to provide in this Agreement for the
indemnification of and the advancement of Expenses (as defined in Section 2(e)) to Indemnitee as
set forth in this Agreement and for the continued coverage of Indemnitee under the Company’s
directors’ and officers’ liability insurance policies.
D. In light of the considerations referred to in the preceding recitals, it is the Company’s
intention and desire that the provisions of this Agreement be construed liberally, subject to their
express terms, to maximize the protections to be provided to Indemnitee hereunder.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. Services to the Company. Indemnitee agrees to serve [as a [director] [officer] [employee]
[agent] of the Company] [, at the request of the Company, as a [director] [officer] [employee]
[agent] [fiduciary] of [another corporation, partnership, joint venture, trust employee benefit
plan or other enterprise]. Indemnitee may at any time and for any reason resign from
such position (subject to any other contractual obligation or any obligation imposed by
operation of law), in which event the Company shall have no obligation under this Agreement to
continue Indemnitee in such position. This Agreement shall not be deemed an employment contract
between the Company (or any of its Subsidiaries or any enterprise) and Indemnitee. Indemnitee
specifically acknowledges that Indemnitee’s employment with the Company (or any of its Subsidiaries
or any enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any
reason, with or without cause, except as may be otherwise provided in any written employment
contract between Indemnitee and the Company (or any of its Subsidiaries or any enterprise), other
applicable formal severance policies duly adopted by the Board, or, with respect to service as a
director or officer of the Company, by the Company’s Constituent Documents, and the General
Corporation Law of the State of Delaware. The foregoing notwithstanding, this Agreement shall
continue in force after Indemnitee has ceased to serve as an [officer] [director] [agent]
[employee] of the Company.
2. Certain Definitions. In addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement with initial capital letters:
(a) “Change in Control” means the occurrence after the date of this Agreement of any of the
following events:
(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 15% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:
(A) for purposes of this Section 2(a)(i), the following acquisitions shall not constitute a
Change in Control: (1) any acquisition of Voting Stock of the Company directly from the Company
that is approved by a majority of the Incumbent Directors, (2) any acquisition of Voting Stock of
the Company by the Company or any Subsidiary, (3) any acquisition of Voting Stock of the Company by
any employee benefit plan (or related trust) sponsored or maintained by the Company or any
Subsidiary, and (4) any acquisition of Voting Stock of the Company by any Person pursuant to a
Business Combination that complies with clauses (A), (B) and (C) of Section 2(a)(iii) below;
(B) if any Person acquires beneficial ownership of 15% or more of combined voting power of the
then-outstanding Voting Stock of the Company as a result of a transaction described in clause
(A)(1) of Section 2(a)(i) and such Person thereafter becomes the beneficial owner of any additional
shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock
of the Company, other than in an acquisition directly from the Company that is approved by a
majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or
similar transaction effected by the Company in which all holders of Voting Stock are treated
equally, such subsequent acquisition shall be deemed to constitute a Change in Control;
(C) a Change in Control will not be deemed to have occurred if a Person acquires beneficial
ownership of 15% or more of the Voting Stock of the Company as a result of a reduction in the
number of shares of Voting Stock of the Company outstanding unless and until such Person thereafter
becomes the beneficial owner of any additional shares of Voting
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Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the
Company, other than in an acquisition directly from the Company that is approved by a majority of
the Incumbent Directors or other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Voting Stock are treated equally; and
(D) if at least a majority of the Incumbent Directors determine in good faith that a Person
has acquired beneficial ownership of 15% or more of the Voting Stock of the Company inadvertently,
and such Person divests as promptly as practicable a sufficient number of shares so that such
Person beneficially owns less than 15% of the Voting Stock of the Company, then no Change in
Control shall have occurred as a result of such Person’s acquisition; or
(ii) a majority of the Directors are not Incumbent Directors; or
(iii) the consummation of a reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of assets
of another corporation, or other transaction (each, a “Business Combination”), unless, in each
case, immediately following such Business Combination (A) all or substantially all of the
individuals and entities who were the beneficial owners of Voting Stock of the Company immediately
prior to such Business Combination beneficially own, directly or indirectly, more than 80% of the
combined voting power of the then outstanding shares of Voting Stock of the entity resulting from
such Business Combination (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting
from such Business Combination, or any employee benefit plan (or related trust) sponsored or
maintained by the Company, any Subsidiary or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business Combination, and
(C) at least a majority of the members of the Board of Directors of the entity resulting from such
Business Combination were Incumbent Directors at the time of the execution of the initial agreement
or of the action of the Board providing for such Business Combination; or
(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C)
of Section 2(a)(iii).
(v) For purposes of this Section 2(a) and as used elsewhere in this Agreement, the following
terms shall have the following meanings:
(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(B) “Incumbent Directors” means the individuals who, as of the date hereof, are Directors of
the Company and any individual becoming a Director subsequent to the date hereof whose election,
nomination for election by the Company’s stockholders, or appointment, was approved by a vote of at
least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the
proxy statement of the
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Company in which such person is named as a nominee for director, without objection to such
nomination); provided, however, that an individual shall not be an Incumbent Director if such
individual’s election or appointment to the Board occurs as a result of an actual or threatened
election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election
or removal of Directors or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board.
(C) “Subsidiary” means an entity in which the Company directly or indirectly beneficially owns
50% or more of the outstanding Voting Stock.
(D) “Voting Stock” means securities entitled to vote generally in the election of directors
(or similar governing bodies).
(b) “Claim” means (i) any threatened, asserted, pending or completed claim, demand, action,
suit or proceeding, whether civil, criminal, administrative, arbitrative, investigative or other,
and whether made pursuant to federal, state or other law; and (ii) any threatened, pending or
completed inquiry or investigation, whether made, instituted or conducted by the Company or any
other person, including without limitation any federal, state or other governmental entity, that
Indemnitee determines might lead to the institution of any such claim, demand, action, suit or
proceeding.
(c) “Controlled Affiliate” means any corporation, limited liability company, partnership,
joint venture, trust or other entity or enterprise, whether or not for profit, that is directly or
indirectly controlled by the Company. For purposes of this definition, “control” means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of an entity or enterprise, whether through the ownership of voting securities, through
other voting rights, by contract or otherwise; provided that direct or indirect beneficial
ownership of capital stock or other interests in an entity or enterprise entitling the holder to
cast 15% or more of the total number of votes generally entitled to be cast in the election of
directors (or persons performing comparable functions) of such entity or enterprise shall be deemed
to constitute control for purposes of this definition.
(d) “Disinterested Director” means a director of the Company who is not and was not a party to
the Claim in respect of which indemnification is sought by Indemnitee.
(e) “Expenses” means all reasonable attorneys’ and experts’ fees and expenses and all other
costs and expenses paid or payable in connection with investigating, defending, being a witness in
or participating in (including on appeal), or preparing to investigate, defend, be a witness in or
participate in (including on appeal), any Claim.
(f) “Indemnifiable Claim” means any Claim based upon, arising out of or resulting from (i) any
actual, alleged or suspected act or failure to act by Indemnitee in his or her capacity as a
director, officer, employee or agent of the Company or as a director, officer, employee, member,
manager, trustee or agent of any other corporation, limited liability company, partnership, joint
venture, trust or other entity or enterprise, whether or not for profit, as to which Indemnitee is
or was serving at the request of the Company as a director, officer, employee, member, manager,
trustee or agent, (ii) any actual, alleged or suspected act or failure to act by Indemnitee in
respect of any business, transaction, communication, filing, disclosure or other activity of the
Company or any other entity or enterprise referred to in clause (i) of this
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sentence, or (iii) Indemnitee’s status as a current or former director, officer, employee or
agent of the Company or as a current or former director, officer, employee, member, manager,
trustee or agent of the Company or any other entity or enterprise referred to in clause (i) of this
sentence or any actual, alleged or suspected act or failure to act by Indemnitee in connection with
any obligation or restriction imposed upon Indemnitee by reason of such status. In addition to any
service at the actual request of the Company, for purposes of this Agreement, Indemnitee shall be
deemed to be serving or to have served at the request of the Company as a director, officer,
employee, member, manager, trustee or agent of another entity or enterprise if Indemnitee is or was
serving as a director, officer, employee, member, manager, trustee or agent of such entity or
enterprise and (i) such entity or enterprise is or at the time of such service was a Controlled
Affiliate, (ii) such entity or enterprise is or at the time of such service was an employee benefit
plan (or related trust) sponsored or maintained by the Company or a Controlled Affiliate, or
(iii) the Company or a Controlled Affiliate directly or indirectly caused or authorized Indemnitee
to be nominated, elected, appointed, designated, employed, engaged or selected to serve in such
capacity.
(g) “Indemnifiable Losses” means any and all Losses relating to, arising out of or resulting
from any Indemnifiable Claim.
(h) “Independent Counsel” means a nationally recognized law firm, or a member of a nationally
recognized law firm, that is experienced in matters of Delaware corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i) the Company (or any
Subsidiary) or Indemnitee in any matter material to either such party (other than with respect to
matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other named (or, as to a threatened matter, reasonably
likely to be named) party to the Indemnifiable Claim giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any
person who, under the applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(i) “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, ERISA
excise taxes, penalties (whether civil, criminal or other) and amounts paid in settlement,
including without limitation all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing.
3. Indemnification Obligation. Subject to Section 8, the Company shall indemnify, defend and
hold harmless Indemnitee, to the fullest extent permitted or required by the laws of the State of
Delaware in effect on the date hereof or as such laws may from time to time hereafter be amended to
increase the scope of such permitted indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided, however, that, except as provided in Sections 5 and 21, Indemnitee
shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim.
4. Advancement of Expenses. Indemnitee shall have the right to advancement by the Company
prior to the final disposition of any Indemnifiable Claim of any and all Expenses
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relating to, arising out of or resulting from any Indemnifiable Claim paid or incurred by
Indemnitee or which Indemnitee determines are reasonably likely to be paid or incurred by
Indemnitee. Indemnitee’s right to such advancement is not subject to the satisfaction of any
standard of conduct. Without limiting the generality or effect of the foregoing, within 10
business days after receipt of any request by Indemnitee, the Company shall, in accordance with
such request (but without duplication), (a) pay such Expenses on behalf of Indemnitee, (b) advance
to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for
such Expenses; provided that Indemnitee shall repay, without interest any amounts actually advanced
to Indemnitee that are determined at the final disposition of the Indemnifiable Claim, and upon
exhaustion or lapse of appeal therefrom, to be in excess of amounts paid or payable by Indemnitee
in respect of Expenses relating to, arising out of or resulting from such Indemnifiable Claim. In
connection with any such payment, advancement or reimbursement, Indemnitee shall execute and
deliver to the Company an undertaking in the form attached hereto as Exhibit A (subject to
Indemnitee filling in the blanks therein and selecting from among the bracketed alternatives
therein), which need not be secured and shall be accepted without reference to Indemnitee’s ability
to repay the Expenses. In no event shall Indemnitee’s right to the payment, advancement or
reimbursement of Expenses pursuant to this Section 4 be conditioned upon any undertaking that is
less favorable to Indemnitee than, or that is in addition to, the undertaking set forth in
Exhibit A.
5. Indemnification for Additional Expenses. Without limiting the generality or effect of the
foregoing, the Company shall indemnify and hold harmless Indemnitee against and, if requested by
Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within 10 business days of
such request, any and all Expenses paid or incurred by Indemnitee or which Indemnitee determines
are reasonably likely to be paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or payment, advancement or
reimbursement of Expenses by the Company under any provision of this Agreement, or under any other
agreement or provision of the Constituent Documents now or hereafter in effect relating to
Indemnifiable Claims, and/or (b) recovery under any directors’ and officers’ liability insurance
policies maintained by the Company, regardless in each case of whether Indemnitee ultimately is
determined to be entitled to such indemnification, reimbursement, advance or insurance recovery, as
the case may be; provided, however, that Indemnitee shall return, without interest, any such
advance of Expenses (or portion thereof) which remains unspent at the final disposition of the
Claim to which the advance related.
6. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any Indemnifiable Loss, but not for all of
the total amount thereof, the Company to the fullest extent permitted by applicable law shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
7. Procedure for Notification. To obtain indemnification under this Agreement in respect of
an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall submit to the Company a written
request therefor, including a brief description (based upon information then available to
Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss, including therein or therewith such
documentation as is reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification.
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8. Determination of Right to Indemnification.
(a) To the extent that Indemnitee shall have been successful on the merits or otherwise in
defense of any Indemnifiable Claim or any portion thereof or in defense of any issue or matter
therein, including without limitation dismissal without prejudice, Indemnitee shall be indemnified
against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable
Claim in accordance with Section 3 and no Standard of Conduct Determination (as defined in
Section 8(b)) shall be required.
(b) To the extent that the provisions of Section 8(a) are inapplicable to an Indemnifiable
Claim that shall have been finally disposed of, any determination of whether Indemnitee has
satisfied any applicable standard of conduct under Delaware law that is a legally required
condition precedent to indemnification of Indemnitee hereunder against Indemnifiable Losses
relating to, arising out of or resulting from such Indemnifiable Claim (a “Standard of Conduct
Determination”) shall be made as follows: (i) if a Change in Control shall not have occurred, or
if a Change in Control shall have occurred but Indemnitee shall have requested that the Standard of
Conduct Determination be made pursuant to this clause (i), (A) by a majority vote of the
Disinterested Directors, even if less than a quorum of the Board, (B) if such Disinterested
Directors so direct, by a majority vote of a committee of Disinterested Directors designated by a
majority vote of all Disinterested Directors, or (C) if there are no such Disinterested Directors,
by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be
delivered to Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee shall
not have requested that the Standard of Conduct Determination be made pursuant to clause (i), by
Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered
to Indemnitee. Indemnitee will cooperate with the person or persons making such Standard of
Conduct Determination, including providing to such person or persons, 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. The Company shall indemnify and hold harmless Indemnitee against and, if requested
by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days
of such request, any and all costs and expenses (including attorneys’ and experts’ fees and
expenses) incurred by Indemnitee in so cooperating with the person or persons making such Standard
of Conduct Determination.
(c) The Company shall use its reasonable best efforts to cause any Standard of Conduct
Determination required under Section 8(b) to be made as promptly as practicable. If (i) the person
or persons empowered or selected under Section 8 to make the Standard of Conduct Determination
shall not have made a determination within 60 days after the later of (A) receipt by the Company of
written notice from Indemnitee advising the Company of the final disposition of the applicable
Indemnifiable Claim (the date of such receipt being the “Notification Date”) and (B) the selection
of an Independent Counsel, if such determination is to be made by Independent Counsel, that is
permitted under the provisions of Section 8(e) to make such determination and (ii) Indemnitee shall
have fulfilled his/her obligations set forth in the second sentence of Section 8(b), then
Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such
60-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the
person or persons making such determination in good faith requires such additional time for the
obtaining or evaluation or documentation and/or information relating thereto.
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(d) If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable
Losses pursuant to Section 7(a), (ii) no determination of whether Indemnitee has satisfied any
applicable standard of conduct under Delaware law is a legally required condition precedent to
indemnification of Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has
been determined or deemed pursuant to Section 7(b) or (c) to have satisfied any applicable standard
of conduct under Delaware law which is a legally required condition precedent to indemnification of
Indemnitee hereunder against any Indemnifiable Losses, then the Company shall pay to Indemnitee,
within 10 business days after the later of (x) the Notification Date in respect of the
Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are related, out of which
such Indemnifiable Losses arose or from which such Indemnifiable Losses resulted and (y) the
earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) above shall
have been satisfied, an amount equal to the amount of such Indemnifiable Losses.
(e) If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to
Section 8(b)(i), the Independent Counsel shall be selected by the Board of Directors, and the
Company shall give written notice to Indemnitee advising him or her of the identity of the
Independent Counsel so selected. If a Standard of Conduct Determination is to be made by
Independent Counsel pursuant to Section 8(b)(ii), the Independent Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of
the Independent Counsel so selected. In either case, Indemnitee or the Company, as applicable,
may, within five business days after receiving written notice of selection from the other, deliver
to the other a written objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria
set forth in the definition of “Independent Counsel” in Section 2(h), and the objection shall set
forth with particularity the factual basis of such assertion. Absent a proper and timely
objection, the person or firm so selected shall act as Independent Counsel. If such written
objection is properly and timely made and substantiated, (i) the Independent Counsel so selected
may not serve as Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit and (ii) the non-objecting party may, at its
option, select an alternative Independent Counsel and give written notice to the other party
advising such other party of the identity of the alternative Independent Counsel so selected, in
which case the provisions of the two immediately preceding sentences and clause (i) of this
sentence shall apply to such subsequent selection and notice. If applicable, the provisions of
clause (ii) of the immediately preceding sentence shall apply to successive alternative selections.
If no Independent Counsel that is permitted under the foregoing provisions of this Section 8(e) to
make the Standard of Conduct Determination shall have been selected within 30 days after the
Company gives its initial notice pursuant to the first sentence of this Section 8(e) or Indemnitee
gives its initial notice pursuant to the second sentence of this Section 8(e), as the case may be,
either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for
resolution of any objection which shall have been made by the Company or Indemnitee to the other’s
selection of Independent Counsel and/or for the appointment as Independent Counsel of a person or
firm selected by the Court or by such other person as the Court shall designate, and the person or
firm with respect to whom all objections are so resolved or the person or firm so appointed will
act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and
expenses of the Independent Counsel incurred in connection with the Independent Counsel’s
determination pursuant to Section 8(b).
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9. Presumption of Entitlement. In making any Standard of Conduct Determination, the person or
persons making such determination shall, to the fullest extent not prohibited by law, presume that
Indemnitee has satisfied the applicable standard of conduct, and the Company may, to the fullest
extent not prohibited by law, overcome such presumption only by its adducing clear and convincing
evidence to the contrary. Any Standard of Conduct Determination that is adverse to Indemnitee may
be challenged by the Indemnitee in the Court of Chancery of the State of Delaware. No
determination by the Company (including by its directors or any Independent Counsel) that
Indemnitee has not satisfied any applicable standard of conduct shall be a defense to any Claim by
Indemnitee for indemnification or reimbursement or advance payment of Expenses by the Company
hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.
10. No Other Presumption. For purposes of this Agreement, the termination of any Claim by
judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea
of nolo contendere or its equivalent, will not create a presumption that Indemnitee did not meet
any applicable standard of conduct or that indemnification hereunder is otherwise not permitted.
11. Reliance as Safe Harbor. For purposes of this Agreement, Indemnitee shall be deemed to
have acted in good faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Company if Indemnitee’s actions or omissions to act are taken in good
faith reliance upon the records of the Company, including its financial statements, or upon
information, opinions, reports or statements furnished to Indemnitee by the officers or employees
of the Company in the course of their duties, or by committees of the Board of Directors, or by any
other person (including legal counsel, accountants and financial advisors) as to matters Indemnitee
reasonably believes are within such other person’s professional or expert competence and who has
been selected with reasonable care by or on behalf of the Company. In addition, the knowledge
and/or actions, or failures to act, of any director, officer, agent or employee of the Company
shall not be imputed to Indemnitee for purposes of determining the right to indemnity hereunder.
The provisions of this Section 11 shall not be deemed to be exclusive or to limit in any way the
other circumstances in which Indemnitee may be deemed or found to have met the applicable standard
of conduct set forth in this Agreement.
12. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other
rights Indemnitee may have under the Constituent Documents, or the substantive laws of the
Company’s jurisdiction of incorporation, any other contract or otherwise (collectively, “Other
Indemnity Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would
have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be
deemed to have such greater right hereunder and (b) to the extent that any change is made to any
Other Indemnity Provision which permits any greater right to indemnification than that provided
under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right
hereunder. The Company will not adopt any amendment to any of the Constituent Documents the effect
of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under this
Agreement or any Other Indemnity Provision.
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13. Liability Insurance and Funding.
(a) For the duration of Indemnitee’s service as a director and/or officer of the Company, and
thereafter for so long as Indemnitee shall be subject to any pending or possible Indemnifiable
Claim, but in no event for a period of less than six years after termination of such service, the
Company shall use commercially reasonable efforts (taking into account the scope and amount of
coverage available relative to the cost thereof) to cause to be maintained in effect policies of
directors’ and officers’ liability insurance providing coverage for directors and/or officers of
the Company that is at least substantially comparable in scope and amount to that provided by the
Company’s current policies of directors’ and officers’ liability insurance. The Company shall
provide Indemnitee with a copy of all directors’ and officers’ liability insurance applications,
binders, policies, declarations, endorsements and other related materials, and shall provide
Indemnitee with a reasonable opportunity to review and comment on the same. Without limiting the
generality or effect of the two immediately preceding sentences, the Company shall not discontinue
or significantly reduce the scope or amount of coverage from one policy period to the next (i)
without the prior approval thereof by a majority vote of the Incumbent Directors, even if less than
a quorum, or (ii) if at the time that any such discontinuation or significant reduction in the
scope or amount of coverage is proposed there are no Incumbent Directors, without the prior written
consent of Indemnitee (which consent shall not be unreasonably withheld or delayed). In all
policies of directors’ and officers’ liability insurance obtained by the Company, Indemnitee shall
be named as an insured in such a manner as to provide Indemnitee the same rights and benefits,
subject to the same limitations, as are accorded to the Company’s directors and officers most
favorably insured by such policy. The Company may, but shall not be required to, create a trust
fund, grant a security interest or use other means, including without limitation a letter of
credit, to ensure the payment of such amounts as may be necessary to satisfy its obligations to
indemnify and advance expenses pursuant to this Agreement.
(b) Within five days of receipt of any notice of any Claim, the Company shall give prompt
notice of the commencement of such Claim to the directors’ and officers’ liability insurers in
accordance with the procedures set forth in the respective policies. The Company shall thereafter
take all necessary or appropriate action to cause such insurers to pay, on behalf of Indemnitee,
all amounts payable as a result of such Claim in accordance with the terms of such policies. The
failure or refusal of such insurers to pay any such amount shall not affect or impair the
obligations of the Company under this Agreement.
14. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee
against other persons or entities (other than Indemnitee’s successors), including any entity or
enterprise referred to in clause (i) of the definition of “Indemnifiable Claim” in Section 2(f).
Indemnitee shall execute all papers reasonably required to evidence such rights (all of
Indemnitee’s reasonable Expenses, including attorneys’ fees and charges, related thereto to be
reimbursed by or, at the option of Indemnitee, advanced by the Company).
15. Duration of Agreement. This Agreement shall continue until and terminate upon the later
of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve [as a [director]
[officer] [employee] [agent] of the Company] [,at the request of the Company, as a [director]
[officer] [employee] [agent] [fiduciary] of [another corporation, partnership, joint venture, trust
employee benefit plan or other enterprise] or (b) one (1) year after the final
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termination of any Claim then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Sections 3, 4, 5 and 8 of this Agreement relating thereto.
16. No Duplication of Payments. The Company shall not be liable under this Agreement to make
any payment to Indemnitee in respect of any Indemnifiable Losses to the extent Indemnitee has
otherwise actually received payment (net of Expenses incurred in connection therewith) under any
insurance policy, the Constituent Documents and Other Indemnity Provisions or otherwise (including
from any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable Claim”
in Section 2(f)) in respect of such Indemnifiable Losses otherwise indemnifiable hereunder.
17. Defense of Claims. The Company shall be entitled to participate in the defense of any
Indemnifiable Claim or to assume the defense thereof, with counsel reasonably satisfactory to the
Indemnitee; provided that if Indemnitee believes, after consultation with counsel selected by
Indemnitee, that (a) the use of counsel chosen by the Company to represent Indemnitee would present
such counsel with an actual or potential conflict, (b) the named parties in any such Indemnifiable
Claim (including any impleaded parties) include both the Company and Indemnitee and Indemnitee
shall conclude that there may be one or more legal defenses available to him or her that are
different from or in addition to those available to the Company, or (c) any such representation by
such counsel would be precluded under the applicable standards of professional conduct then
prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law
firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim) at the
Company’s expense. The Company shall not be liable to Indemnitee under this Agreement for any
amounts paid in settlement of any threatened or pending Indemnifiable Claim effected without the
Company’s prior written consent. The Company shall not, without the prior written consent of the
Indemnitee, effect any settlement of any threatened or pending Indemnifiable Claim to which the
Indemnitee is, or could have been, a party unless such settlement solely involves the payment of
money and includes a complete and unconditional release of the Indemnitee from all liability on any
claims that are the subject matter of such Indemnifiable Claim. Neither the Company nor Indemnitee
shall unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may
withhold consent to any settlement that does not provide a complete and unconditional release of
Indemnitee.
18. Successors and Binding Agreement. (a) The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form and substance
satisfactory to Indemnitee and his or her counsel, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be required to perform if no
such succession had taken place. This Agreement shall be binding upon and inure to the benefit of
the Company and any successor to the Company, including without limitation any person acquiring
directly or indirectly all or substantially all of the business or assets of the Company whether by
purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be
deemed the “Company” for purposes of this Agreement), but shall not otherwise be assignable or
delegatable by the Company.
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(b) This Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, heirs, distributees, legatees and
other successors.
(c) This Agreement is personal in nature and neither of the parties hereto shall, without the
consent of the other, assign or delegate this Agreement or any rights or obligations hereunder
except as expressly provided in Sections 18(a) and 18(b). Without limiting the generality or
effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable,
whether by pledge, creation of a security interest or otherwise, other than by a transfer by the
Indemnitee’s will or by the laws of descent and distribution, and, in the event of any attempted
assignment or transfer contrary to this Section 18(c), the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.
19. Notices. For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given when hand delivered or dispatched
by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return receipt requested,
postage prepaid or one business day after having been sent for next-day delivery by a nationally
recognized overnight courier service, addressed to the Company (to the attention of the Secretary
of the Company) and to Indemnitee at the applicable address shown on the signature page hereto, or
to such other address as any party may have furnished to the other in writing and in accordance
herewith, except that notices of changes of address will be effective only upon receipt.
20. Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by and construed in accordance with the substantive laws of the State
of Delaware, without giving effect to the principles of conflict of laws of such State. The
Company and Indemnitee each hereby irrevocably (i) consent to the jurisdiction of the Chancery
Court of the State of Delaware for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement, (ii) agree that any action instituted under this
Agreement shall be brought only in the Chancery Court of the State of Delaware, (iii) appoint, to
the extent such party is not otherwise subject to service of process in the State of Delaware,
irrevocably RL&F Service Corp., One Xxxxxx Square, 10th Floor, 10th and King Streets, Wilmington,
Delaware 19801 as its agent in the State of Delaware as such party’s agent for acceptance of legal
process in connection with any such action or proceeding against such party with the same legal
force and validity as if served upon such party personally within the State of Delaware, (iv) waive
any objection to the laying of venue of any such action or proceeding in the Delaware Court, and
(v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought
in the Delaware Court has been brought in an improper or inconvenient forum.
21. Validity. If any provision of this Agreement or the application of any provision hereof
to any person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of
this Agreement and the application of such provision to any other person or circumstance shall not
be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent, and only to the extent, necessary to make it enforceable, valid or legal.
In the event that any court or other adjudicative body shall decline to
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reform any provision of this Agreement held to be invalid, unenforceable or otherwise illegal
as contemplated by the immediately preceding sentence, the parties thereto shall take all such
action as may be necessary or appropriate to replace the provision so held to be invalid,
unenforceable or otherwise illegal with one or more alternative provisions that effectuate the
purpose and intent of the original provisions of this Agreement as fully as possible without being
invalid, unenforceable or otherwise illegal.
22. Miscellaneous. No provision of this Agreement may be waived, modified or discharged
unless such waiver, modification or discharge is agreed to in writing signed by Indemnitee and the
Company. No waiver by either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise, expressed or
implied with respect to the subject matter hereof have been made by either party that are not set
forth expressly in this Agreement. References to Sections are to references to Sections of this
Agreement.
23. Legal Fees and Expenses. It is the intent of the Company that Indemnitee not be required
to incur legal fees and or other Expenses associated with the interpretation, enforcement or
defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and
expense thereof would substantially detract from the benefits intended to be extended to Indemnitee
hereunder. Accordingly, without limiting the generality or effect of any other provision hereof,
if it should appear to Indemnitee that the Company has failed to comply with any of its obligations
under this Agreement (including its obligations under Section 4) or in the event that the Company
or any other person takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to
recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder,
the Company irrevocably authorizes the Indemnitee from time to time to retain counsel of
Indemnitee’s choice, at the expense of the Company as hereafter provided, to advise and represent
Indemnitee in connection with any such interpretation, enforcement or defense, including without
limitation the initiation or defense of any litigation or other legal action, whether by or against
the Company or any director, officer, stockholder or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to Indemnitee’s entering into an
attorney-client relationship with such counsel, and in that connection the Company and Indemnitee
agree that a confidential relationship shall exist between Indemnitee and such counsel. Without
respect to whether Indemnitee prevails, in whole or in part, in connection with any of the
foregoing, the Company will pay and be solely financially responsible for any and all attorneys’
and related fees and expenses incurred by Indemnitee in connection with any of the foregoing.
24. Headings. The headings of the sections and 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 or interpretation thereof.
25. Certain Interpretive Matters. Unless the context of this Agreement otherwise requires,
(a) “it” or “its” or words of any gender include each other gender, (b) words using the singular or
plural number also include the plural or singular number, respectively, (c) the terms
13
“hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement,
(d) the terms “Article,” “Section,” “Annex” or “Exhibit” refer to the specified Article, Section,
Annex or Exhibit of or to this Agreement, (e) the terms “include,” “includes” and “including” will
be deemed to be followed by the words “without limitation” (whether or not so expressed), and
(f) the word “or” is disjunctive but not exclusive. Whenever this Agreement refers to a number of
days, such number will refer to calendar days unless business days are specified and whenever
action must be taken (including the giving of notice or the delivery of documents) under this
Agreement during a certain period of time or by a particular date that ends or occurs on a
non-business day, then such period or date will be extended until the immediately following
business day. As used herein, “business day” means any day other than Saturday, Sunday or a United
States federal holiday.
26. Counterparts. This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original but all of which together shall constitute one and the same
agreement. Only one such counterpart signed by the party against whom enforceability is sought
needs to be produced to evidence the existence of this Agreement. Delivery of a counterpart by
facsimile shall be as effective as delivery of an original.
27. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon
being served with any summons, citation, subpoena, complaint, indictment, information or other
document relating to any Claim or matter which may be subject to indemnification or advancement of
Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve
the Company of any obligation which it may have to the Indemnitee under this Agreement or
otherwise.
[Signatures Appear On Following Page]
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IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized
representative to execute this Agreement as of the date first above written.
| XXXX HOLDING CORPORATION | ||||
| 0000 Xxxx Xxxxxx | ||||
| Xxxxxx, Xxxx 00000 | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| [INDEMNITEE] | ||||
| [Address] | ||||
| [Indemnitee] |
||||
15
EXHIBIT A
UNDERTAKING
This Undertaking is submitted pursuant to the Director Indemnification Agreement, dated as of
,
(the “Indemnification Agreement”), between Xxxx Holding Corporation, a
Delaware corporation (the “Company”), and the undersigned. Capitalized terms used and not
otherwise defined herein have the meanings ascribed to such terms in the Indemnification Agreement.
The undersigned hereby requests [payment], [advancement], [reimbursement] by the Company of
Expenses which the undersigned [has incurred] [reasonably expects to incur] in connection with
(the “Indemnifiable Claim”).
The undersigned hereby undertakes to repay the [payment], [advancement], [reimbursement] of
Expenses made by the Company to or on behalf of the undersigned in response to the foregoing
request if it is determined, following the final disposition of the Indemnifiable Claim and in
accordance with Section 8 of the Indemnification Agreement, that the undersigned is not entitled to
indemnification by the Company under the Indemnification Agreement with respect to the
Indemnifiable Claim.
IN WITNESS WHEREOF, the undersigned has executed this Undertaking as of this
day of , .
| [Indemnitee] |
