INDEMNITY AGREEMENT
THIS AGREEMENT, made and entered into this day of November, 1996,
is between ("Director"), and XXXX XXXXX XXXXX INC., a
Virginia corporation (the "Corporation").
RECITALS
WHEREAS, Director has experience and expertise that are valuable to the
Corporation.
WHEREAS, the Corporation desires that Director continue to serve as a
director, and Director is willing to so serve provided the Corporation gives
Director specific assurances concerning indemnification against his liability
for actions taken on behalf of the Corporation.
WHEREAS, the Corporation is entitled to act pursuant to Section 13.1-697
of the Virginia Stock Corporation Act to indemnify Director against liability.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the parties hereto agree as follows:
(1) In this Agreement:
"Expenses" includes counsel fees.
"Liability" means the obligation to pay a judgment, settlement,
penalty, fine, including any excise tax assessed with respect to an employee
benefit plan, or reasonable expenses incurred with respect to a proceeding.
"Official capacity" means service by the Director in his capacity as
a director of the Corporation. "Official capacity" does not include service for
any other foreign or domestic corporation or any partnership, joint venture,
trust, employee benefit plan, or other enterprise.
"Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
"Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative or investigative
and whether formal or informal.
(2) Subject to the terms and conditions herein set forth, the Director
hereby agrees to serve as a director of the Corporation until his successor
shall have been duly elected and in that capacity to exercise his good faith
business judgment of the best interests of the Corporation.
(3) The Corporation hereby agrees to indemnify the Director if he
becomes a party to any proceeding by reason of the fact that he is or was a
director of the Corporation, or is or was serving at the request of the
Corporation as a director, trustee, partner or officer of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against any liability incurred by him in connection with such proceeding if (i)
he believed, in the case of conduct in his official capacity, that his conduct
was in the best interests of the Corporation, and in all other cases that his
conduct was at least not opposed to its best interests, and, in the case of any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful, (ii) in connection with a proceeding by or in the right of the
Corporation, he was not adjudged liable to the Corporation, and (iii) in
connection with any proceeding charging improper benefit to him, whether or not
involving action in his official capacity, he was not adjudged liable on the
basis that personal benefit was improperly received by him. The Director shall
be considered to be serving an employee benefit plan at the Corporation's
request if his duties to the Corporation also impose duties on, or otherwise
involve services by, him to the plan or to participants in or beneficiaries of
the plan. The Director's conduct with respect to an employee benefit plan for a
purpose he believed to be in the interests of the participants and beneficiaries
of the plan is conduct that satisfies the requirements of this section.
(4) The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not of
itself create a presumption that the Director did not meet the standard of
conduct described in section (3) of this Agreement.
(5) To the extent that the Director has been successful on the merits or
otherwise in defense of any proceeding referred to in Section (3) of this
Agreement, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses actually and reasonably incurred by him in
connection therewith.
(6) Any indemnification under Section (3) of this Agreement (unless
ordered by a court) shall be made by the Corporation only upon a determination
that indemnification of the Director is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section (3). The
determination shall be made:
(a) By the Board of Directors by a majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
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(b) If a quorum cannot be obtained under subsection (a) of this
section, by majority vote of a committee duly designated by the Board of
Directors (in which designation directors who are parties may participate),
consisting solely of two or more directors not at the time parties to the
proceeding;
(c) By special legal counsel:
(i) Selected by the Board of Directors or its committee in the
manner prescribed in subsection (a) or (b) of this section; or
(ii) If a quorum of the Board of Directors cannot be obtained
under subsection (a) of this section and a committee cannot be designated under
subsection (b) of this section, selected by majority vote of the full Board of
Directors, in which selection directors who are parties may participate; or
(d) By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may not be
voted on the determination.
Notwithstanding the foregoing provisions of this section (6), in the
event that there has been a change in the composition of a majority of the
directors of the Corporation between the date of this Agreement and the date
that the claim for indemnification is made (other than changes in the make-up of
the Board which have been approved by not less than 2/3 of the directors then
serving), then the determination whether indemnification is permissible shall be
made by special legal counsel to be selected by the Director from among the
following law firms or other law firms of comparable size and experience:
(i) White & Case, New York, New York:
(ii) King & Spalding, Atlanta, Georgia; or
(iii) Hunton & Xxxxxxxx, Richmond, Virginia
Evaluation as to reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, except that if the
determination is made by special legal counsel, evaluation as to reasonableness
of expenses shall be made by those entitled under subsection (c) of this section
to select counsel.
(7) (a) The Corporation shall pay for or reimburse the reasonable
expenses incurred by the Director in advance of final disposition of a
proceeding if:
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(i) The Director furnishes the Corporation a written statement
of his good faith belief that he has met the standard of conduct described in
Section (3);
(ii) The Director furnishes the Corporation a written
undertaking, executed personally or on his behalf, to repay the advance if it is
ultimately determined that he did not meet the standard of conduct; and
(iii) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this
Agreement.
(b) The undertaking required by paragraph (ii) of subsection (a) of
this section shall be an unlimited general obligation of the Director but need
not be secured and may be accepted without reference to financial ability to
make repayment.
(8) The obligations of the Corporation hereunder shall survive the
termination of this Agreement and any termination of the Director as a director
of the Corporation. The indemnification hereby provided and provided hereafter
shall not be exclusive of any other rights to which any person may be entitled,
including any right under policies of insurance that may be purchased and
maintained by the Corporation or others, with respect to claims, issues or
matters in relation to which the Corporation would not have the power to
indemnify the Director under the provisions of this Agreement.
(9) If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.
(10) Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given if delivered by hand
or sent by certified or registered mail, postage prepaid, as follows:
If to the Corporation:
Xxxx Xxxxx Xxxxx Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Secretary
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If to Director:
_________________________________
_________________________________
_________________________________
or such other address or addresses as may be specified from time to time in a
written notice given by the party entitled to receive any such notice.
(11) In the event that after the date of this Agreement the Director is
reelected to serve as a director of the Corporation, then the term of this
Agreement shall automatically be extended for the duration of his service as a
director unless either party elects to terminate this Agreement by delivery of
written notice to the other party at least 90 days prior to the annual meeting
at which the director stands for reelection.
(12) Notwithstanding any changes in the Articles of Incorporation or
Bylaws of the Corporation after the date of this Agreement, this Agreement
cannot be amended or revoked except with the prior written approval of both
parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
XXXX XXXXX XXXXX INC.
By:
______________________________________
Xxxxxx X. Xxxxx
Secretary
______________________________________
[Typed Name]
Director
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