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EXHIBIT 10.11
FORM OF INDEMNIFICATION AGREEMENT BETWEEN
THE COMPANY AND EACH OF ITS OFFICERS AND DIRECTORS
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INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into as of this _____ day of October,
1996, by and between MEDIRISK, INC., a Delaware corporation (the "Company"), and
____________, a [director/officer] of the Company ("Indemnitee").
BACKGROUND
A. Section VI of the Bylaws of the Company and Article VI of the
Certificate of Incorporation of the Company permit the Company to indemnify
directors of the Company under certain circumstances in accordance with the
provisions of the Delaware General Corporate Law, as the same exists or may
hereafter be amended (the "DGCL").
B. The parties hereto desire to memorialize herein the Company's
indemnification obligations to the Indemnitee, and, in addition, to set forth
certain covenants and agreements with respect to the obligations of the Company
to indemnify the Indemnitee.
AGREEMENT
For and in consideration of the mutual agreements herein contained, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. The following capitalized terms are used in this
Agreement with the meanings thereafter ascribed:
(a) "Corporation" means the Company, and any domestic or foreign entity
that is the successor entity to the Company by merger, combination,
consolidation, or other transaction in which the separate existence of the
Company ceases.
(b) "Director" or "director" means an individual who is or was a member of
the Board of Directors of the Corporation, or an individual who, while a member
of the Board of Directors of the Corporation, is or was serving at the
Corporation's request as a director, officer, partner, trustee, employee, or
agent of another corporation (including any subsidiary of the Corporation),
partnership, limited liability company, joint venture, trust, employee benefit
plan, or other enterprise. A Director is considered to be serving an employee
benefit plan at the Corporation's request if such Director's duties to the
Corporation also impose duties on, or otherwise involve services by, such
Director to the participants in or beneficiaries of the plan. The term
"Director" or "director" includes, unless the context requires otherwise, the
estate or personal representative of a Director. For the purposes of this
Agreement,
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Indemnitee serves as a Director of each of the subsidiaries of the Corporation
at the request of the Corporation.
(c) "Expenses" includes attorneys' fees and other expenses actually and
reasonably incurred (i) by a Party in connection with the defense or settlement
of a Proceeding or (ii) by a Director or Officer in connection with a
Proceeding for which such Director or Officer is subpoenaed to appear as a
witness.
(d) "Indemnifiable Expenses" means all Expenses, Liability, and losses
(including attorneys' fees, judgments, penalties, fines, and amounts paid or to
be paid in any settlement approved in advance by the Corporation, such approval
not to be unreasonably withheld) actually and reasonably incurred or suffered
by Indemnitee in connection with a Proceeding, whether as a Party to the
Proceeding or as a witness who has been subpoenaed to appear at the Proceeding.
(e) "Interim Expenses" means Indemnifiable Expenses incurred by Indemnitee
in connection with any Proceeding to which Indemnitee is a Party in advance of
the final disposition thereof.
(f) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable Expenses incurred with respect to a Proceeding.
(g) "Officer" or "officer" means an individual who is or was elected by
the Board of Directors of the Corporation as an officer of the Corporation, or
an individual who, while an officer of the Corporation, is or was serving at
the Corporation's request as a director, officer, partner, trustee, employee,
or agent of another corporation (including any subsidiary of the Corporation),
partnership, limited liability company, joint venture, trust, employee benefit
plan, or other enterprise. The term "Officer" or "officer" includes, unless
the context requires otherwise, the estate or personal representative of an
Officer.
(h) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a Proceeding by reason of the fact that
such individual is or was a Director or an Officer of the Corporation.
(i) "Proceeding" means any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, arbitrative, or
investigative, whether formal or informal, any appeal in such an action, suit,
or proceeding, and any inquiry of investigation that could lead to such an
action, suit, or proceeding, whether formal or informal.
(j) "Special Legal Counsel" means a law firm, an attorney or a member of a
law firm, that is experienced in matters of corporate law and neither currently
is, nor in the past five (5) years has been, retained to represent (A) either
the Corporation or
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Indemnitee in any matter material to either party, or (B) any other party to the
Proceeding giving rise to a claim for indemnification hereunder. The term
"Special Legal Counsel" shall not include any person who, under the applicable
standards of professional conduct prevailing at the time of the representation,
would have a conflict of interest in representing either the Corporation or
Indemnitee in an action to determine Indemnitee's rights under the provisions of
the Corporation's Certificate of Incorporation, Bylaws, or any agreement upon
which Indemnitee relies to establish Indemnitee's right to indemnification or
advancement of expenses.
2. Indemnification Subject to authorization pursuant to Section 5 hereof,
the Corporation shall indemnify Indemnitee against all Indemnifiable Expenses
incurred by Indemnitee in connection with any Proceeding in which Indemnitee
was, is, or is threatened to be:
(a) made a party because Indemnitee is or was a Director or Officer of the
Corporation if (i) Indemnitee acted in a manner believed in good faith by
Indemnitee to be in or not opposed to the best interests of the Corporation, and
(ii) in the case of any criminal Proceeding, Indemnitee had no reasonable cause
to believe Indemnitee's conduct was unlawful, or
(b) subpoenaed to appear as a witness.
3. Exclusions. The Corporation shall not be obligated to indemnify
Indemnitee under this Agreement in connection with any Proceeding in which
Indemnitee:
(a) was adjudged liable to the Corporation or is subjected to injunctive
relief in favor of the Corporation for:
(i) any appropriation, in violation of the duties of Indemnitee, of
any business opportunity of the Corporation;
(ii) acts or omissions which involve intentional misconduct or a
knowing violation of the law;
(iii)the types of liability set forth in Section 170 of the DGCL;
(iv) any transaction for which Indemnitee received an improper
personal benefit; or
(v) an accounting of profits made from the purchase by Indemnitee of
securities of the Corporation pursuant to Section 16(b) of the Securities
Exchange Act of 1934, as amended, or similar provisions of any state
statutory law;
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(b) receives payment from an insurance policy, provided that the
Corporation shall remain obligated to indemnify Indemnitee hereunder for all
Indemnifiable Expenses in excess of the payment received from such insurance
policy; or
(c) receives payment from the Corporation other than pursuant to this
Agreement, provided that the Corporation shall be obligated to indemnify
Indemnitee hereunder for all Indemnifiable Expenses in excess of such payment
from the Corporation.
4. Mandatory Indemnification for Successful Party. To the extent that
Indemnitee has been successful, on the merits or otherwise, in the defense of
any Proceeding to which Indemnitee was a Party, or in defense of any claim,
issue, or matter therein, because Indemnitee is or was a Director or Officer of
the Corporation, the Corporation shall indemnify Indemnitee against all
Indemnifiable Expenses actually and reasonably incurred by Indemnitee, including
all expenses incurred by Indemnitee in connection with establishing Indemnitee's
right to indemnification pursuant to this Section 4, in whole or in part,
subject only to the exclusions in Sections 3(b) and 3(c) hereof.
5. Authorization and Determination of Indemnification.
(a) Except with respect to any mandatory indemnification pursuant to
Section 4 hereof, and except as may be ordered by a court, the Corporation shall
not be liable to Indemnitee under Section 2(a) hereof unless and until, (i)
Indemnitee delivers a written demand to the Corporation pursuant to Section 7
hereof and (ii) the Corporation makes a determination in the manner set forth in
Section 5(b) below, that indemnification of Indemnitee is proper under the
circumstances because Indemnitee has met the applicable standard of conduct set
forth in Section 2(a) hereof (the "Standard of Conduct"). For purposes of such
determination, the termination of a Proceeding by judgment, order, settlement,
or conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that Indemnitee did not meet the Standard of Conduct.
Indemnitee shall be deemed to have been found liable in respect of any claim,
issue or matter only after Indemnitee shall have been so adjudged by a court of
competent jurisdiction and after the conclusion of all appeals therefrom.
(b) The determination as to whether Indemnitee has met the Standard of
Conduct shall be made within forty-five (45) days from the date the written
demand of Indemnitee pursuant to Section 7 hereof is received by the Corporation
by:
(i) The Board of Directors of the Corporation, by majority vote of a
quorum consisting of Directors not at the time Parties to the Proceeding
or, if such a quorum cannot be obtained, then 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 (2)
or more Directors not at the time Parties to the Proceeding; or
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(ii) By Special Legal Counsel to the Corporation, which Special
Legal Counsel is selected by the Board of Directors or its committee in
the manner prescribed by subparagraph (i) above or, if such a quorum
cannot be obtained and such a committee cannot be designated, then
Special Legal Counsel shall be selected by majority vote of the full
Board of Directors (in which selection Directors who are Parties may
participate); or
(iii) The stockholders of the Corporation holding a majority of
votes of voting securities, provided that shares of voting securities
owned by or voted under the control of Directors or Officers who are at
the time Parties shall be excluded from the vote with respect to the
determination.
(c) The Corporation shall not be liable to Indemnitee under Section 2(b)
hereof, unless (i) Indemnitee has delivered a written demand to the Corporation
pursuant to Section 7 hereof and (ii) Indemnitee is, at the time, not a named
Party to a Proceeding. The Corporation may require Indemnitee to comply with
the provisions of Section 6 hereof as a condition precedent to the payment of
Indemnifiable Expenses.
(d) Evaluation as to reasonableness of Indemnifiable Expenses or Expenses
shall be made in the same manner as the determination that the Indemnitee has
met the applicable Standard of Conduct, except that if the determination that
Indemnitee has met the applicable Standard of Conduct is made by Special Legal
Counsel, evaluation as to reasonableness of Indemnifiable Expenses or Expenses
shall be made by those entitled under paragraph (ii) of Section 5(b) to select
such Special Legal Counsel.
6. Interim Expenses. The Corporation shall advance Interim Expenses
incurred by Indemnitee if:
(a) Indemnitee furnishes the Corporation with a written affirmation of
Indemnitee's good faith belief that Indemnitee has met the Standard of Conduct
and has not engaged in the conduct described in Section 3(a) hereof; and
(b) Indemnitee furnishes the Corporation with a written undertaking,
executed personally or on Indemnitee's behalf, in substantially the form
attached hereto as Annex I, to repay any amounts advanced under this Section 6
if it is ultimately determined that Indemnitee has not met the Standard of
Conduct or if it is ultimately determined that indemnification of Indemnitee
against such Interim Expenses is prohibited by the DGCL. The written
undertaking required herein must be an unlimited general obligation of
Indemnitee but need not be secured and may be accepted without reference to
financial ability to make repayment.
7. Procedure for Making Demand. If Indemnitee is entitled to make a claim
for indemnification pursuant to Section 2 of this Agreement, Indemnitee shall
deliver to the Corporation Indemnitee's written request for payment of
Indemnifiable Expenses
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(which written request shall include, in the case of a request for Interim
Expenses, the written affirmation and undertaking of Indemnitee referred to in
Section 6 hereof).
8. Payment of Indemnifiable Expenses. Within fifteen (15) days after the
determination pursuant to Section 5 hereof that Indemnitee has met the Standard
of Conduct, the Corporation shall deliver to Indemnitee either (a) payment of
such indemnification or (b) written notice by the Corporation that the
Corporation has determined that the Indemnitee is not entitled to
indemnification. If Indemnitee has not received either the payment or the
written determination from the Corporation within sixty (60) days after receipt
by the Corporation of such written request, Indemnitee may, but need not, at any
time thereafter, bring an action against the Corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, Indemnitee shall
also be entitled to be paid for the expense (including attorneys' fees) of
bringing such action.
9. Effect of Changes in Law or Corporate Documents. No changes in the DGCL
and no amendment to the Corporation's Certificate of Incorporation or Bylaws
after the date hereof shall have the effect of limiting or eliminating the
indemnification available under this Agreement as to any act or omission which
has occurred, or capacity in which Indemnitee served prior to such amendment.
If, after the date of this Agreement, any change in any applicable law, statute,
or rule expands the power of the Corporation to indemnify a Director or Officer,
Indemnitee's rights and the Corporation's obligations under this Agreement shall
be expanded, without any action by Indemnitee or the Corporation, to include
such change. If any change in any applicable law, statute, or rule narrows the
right of the Corporation to indemnify a Director or Officer, such change, except
to the extent otherwise required by law, shall have no effect on this Agreement
or the parties' rights or obligations hereunder.
10. Indemnitee's Obligations. Indemnitee shall promptly advise the
Corporation in writing of the institution of any Proceeding which is or may be
subject to this Agreement, and shall keep the Corporation generally informed of
and shall consult with the Corporation with respect to, the status of any such
Proceeding. Notices to the Corporation shall be sent to: Two Piedmont Center,
Suite 400, 0000 Xxxxxxxx Xxxx X.X., Xxxxxxx, Xxxxxxx 00000-0000, Attention:
Chief Executive Officer (or such other address as the Corporation shall
designate in writing to Indemnitee). Notices shall be deemed received five (5)
days after the date postmarked if sent by United States mail, postage prepaid
and properly addressed. In the event of payment by the Corporation to Indemnitee
under this Agreement, Indemnitee agrees that the Corporation shall be subrogated
to the extent of such payment to all the rights of recovery of Indemnitee, and
Indemnitee agrees to execute all papers required and to do everything necessary
to secure such rights, including the execution of such documents necessary to
enable the Corporation effectively to bring suit to enforce such rights. In
addition, Indemnitee agrees to give the Corporation such information and
cooperation as the Corporation may reasonably require and as shall be within
Indemnitee's power regarding any Proceeding which is or may be subject to this
Agreement.
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11. Successors. This Agreement establishes contract rights which shall be
binding upon, and shall inure to the benefit of, the successors, assigns, heirs,
and legal representatives of the parties hereto.
12. Contract Rights Not Exclusive. The contract rights conferred by this
Agreement shall be in addition to, but not exclusive of, any other right which
Indemnitee may have or may hereafter acquire under any statute, the Certificate
of Incorporation or Bylaws of the Corporation, or any agreement, vote of
stockholders or disinterested directors, or otherwise. The rights granted in
this Agreement supersede any similar rights granted under any previous written
agreement between the Corporation and Indemnitee with respect to the subject
matter hereof.
13. Amendment, Modification and Waiver. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by both
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
14. Choice of Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Georgia. The parties hereto agree that any appropriate state court sitting in
Xxxxxx County, Georgia or any Federal Court sitting in the Northern District of
Georgia shall have exclusive jurisdiction over any case or controversy arising
under or in connection with this Agreement and shall be a proper forum in which
to adjudicate such case or controversy. Each party hereto irrevocably consents
to the jurisdiction of such courts, and irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such suit, action, or proceeding in any such court, and further waives the
right to object, with respect to such suit, action, or proceeding, that such
court does not have jurisdiction over such party.
15. Captions and Section Headings. Captions and section headings used
herein are for convenience only and are not a part of this Agreement and shall
not be used in construing it.
16. Severability. Should any provision of this Agreement, or any clause
hereof, be held to be invalid, illegal or unenforceable, in whole or in part,
the remaining provisions and clauses of this Agreement shall remain fully
enforceable and binding on the parties hereto. To the extent permitted by law,
the parties hereto waive any provision of law which renders any such provision
prohibited or unenforceable in any respect.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Signatures appear on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as the
day and year first written above.
MEDIRISK, INC.
By: __________________________
Name:________________________
Title:_________________________
INDEMNITEE
_____________________________(SEAL)
Name:
[Director/Officer]
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Annex I
to
Indemnification Agreement
Form of Undertaking Agreement
This AGREEMENT is made on _________________, between MEDIRISK, INC., a
Delaware corporation (the "Corporation"), and ______________________ [, a member
of the Board of Director] [an officer] of the Corporation ("Indemnitee").
WHEREAS, Indemnitee has become involved in investigations, claims,
actions, suits, or proceedings which have arisen as a result of Indemnitee's
service to the Corporation; and
WHEREAS, Indemnitee desires that the Corporation pay any and all expenses
(including, but not limited to, attorneys' fees and court costs) actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in defending or
investigating any such investigations, claims, actions, suits, or proceedings
and that such payment be made in advance of the final disposition of such
investigations, claims, actions, suits, or proceedings to the extent that
Indemnitee has not been previously reimbursed by insurance; and
WHEREAS, the Corporation is willing to make such payments but, in
accordance with Section 145 of the Delaware General Corporate Law (the "DGCL"),
the Corporation may make such payments only if it receives an undertaking to
repay from Indemnitee; and
WHEREAS, Indemnitee is willing to give such an undertaking.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
1. Indemnitee affirms his good faith belief that he has met the Standard of
Conduct necessary for indemnification as defined in Section 5(a) of the
Indemnification Agreement between the Corporation and Indemnitee (the
"Indemnification Agreement") and has not engaged in the conduct described in
Section 3(a) of the Indemnification Agreement.
2. In regard to any payments made by the Corporation to Indemnitee pursuant
to the terms of the Indemnification Agreement or pursuant to Section VI of the
Bylaws of the Corporation, Indemnitee undertakes and agrees to repay to the
Corporation any and all amounts so paid promptly and in any event within thirty
(30) days after (a) any determination made pursuant to Section 5 of the
Indemnification Agreement that Indemnitee has not met the applicable Standard of
Conduct defined therein, or (b) any
Annex I to Indemnification Agreement - Page 1
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final determination that Indemnitee is not entitled to indemnification
hereunder, or pursuant to the Bylaws of the Corporation, or pursuant to the
DGCL.
3. This Agreement shall not affect in any manner the rights which
Indemnitee may have against the Corporation, any insurer, or any other person to
seek indemnification for or reimbursement of (a) any expenses referred to herein
or (b) any judgment which may be rendered in any litigation or proceeding.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
MEDIRISK, INC.
By: ________________________
Name:_______________________
Title:______________________
INDEMNITEE
By: ________________________
Name:_______________________
[Director/Officer]
Annex I to Indemnification Agreement - Page 2
