Form of Director and Officer Indemnity Agreement
Form
of Director and Officer
Indemnity
Agreement
AGREEMENT,
effective as of July 1, 1986, between Southwestern Xxxx Corporation,
a
Delaware corporation (the "Company"), and separately with each Director and
Officer of the Company (the "Indemnitee").
WHEREAS,
Indemnitee is a director or officer of the Company;
WHEREAS,
both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in today's environment;
WHEREAS,
basic protection against undue risk of personal liability of directors
and officers heretofore has, in part, been provided through insurance coverage
providing reasonable protection at a reasonable cost, and Indemnitee has relied
on the availability of such coverage; but as a result of substantial changes
in
the marketplace for such insurance, it has become increasingly more difficult
to
obtain such insurance on terms providing reasonable protection at a reasonable
cost;
WHEREAS,
the Bylaws of the Company require the Company to indemnify and advance
expenses to its directors and officers to the full extent permitted by law
and
the Indemnitee has been serving and continues to serve as a director or officer
of the Company in part in reliance on such Bylaws;
WHEREAS,
Section 145(f) of the Delaware General Corporation law expressly
recognizes that the indemnification provisions of the Delaware Corporation
law
are not exclusive of any other rights to which a person seeking indemnification
may be entitled by bylaw, agreement, vote of stockholders or otherwise, and
this
Agreement is being entered into pursuant to such provision;
WHEREAS,
in recognition of Indemnitee's need for substantial protection against
personal liability in order to assure Indemnitee's continued service to the
Company in an effective manner and Indemnitee's reliance on the aforesaid
Bylaws, and in part to provide Indemnitee with specific contractual assurance
that the protection promised by such Bylaws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of such
Bylaws or any change in the composition of the Company's Board of Directors
or
acquisition of the Company), the Company wishes to provide in this Agreement
for
the indemnification of and the advancing of expenses to Indemnitee to the full
extent (whether partial or complete) permitted by law and as set forth in this
Agreement and, to the extent an outside insurance policy/policies is/are
maintained, for the continued coverage of Indemnitee under the Company's
directors' and officers' liability insurance policies;
WHEREAS,
while this Agreement will be of full force and effect immediately
upon
its execution, the Board of Directors intends to place this Agreement before
the
Shareowners at the next Annual Meeting for ratification;
NOW,
THEREFORE, in consideration of the foregoing premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:
1.0
CERTAIN DEFINITIONS.
(a)
Change in Control:
shall be deemed
to have occurred if (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as
amended), other than a trustee or other fiduciary holding securities under
an
employee benefit plan of the Company or a corporation owned directly or
indirectly by the Shareowners of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 20% or more
of the
total voting power represented by the Company's then outstanding voting
securities, or (ii) during any period of two consecutive years, individuals
who
at the beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination
for
election by the Company's Shareowners was approved by a vote of at least
two-thirds (⅔) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election
was
previously so approved, cease for any reason to constitute a majority thereof,
or (iii) the Shareowners of the Company approve a merger or consolidation of
the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least 80%
of
the total voting power represented by the voting securities of the Company
or
such surviving entity outstanding immediately after such merger or
consolidation, or the Shareowners of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets.
(b) Claim: is
any threatened, pending or completed action, suit or proceeding, or any inquiry
or investigation, whether conducted by or on behalf of the Company or any other
party, that Indemnitee in good faith believes might lead to the institution
of
any such action, suit or proceeding, whether civil, criminal, administrative,
investigative or other.
(c) Expenses: include
attorneys' fees and all other costs, expenses and obligations paid or incurred
in connection with investigating, defending, being a witness in or participating
in (including on appeal), or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event.
(d) Indemnifiable
Event: is any event or occurrence related to
the fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company
as
a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership or joint venture.
(e) Losses:
are any judgments, fines and amounts paid in settlement (including
all interest assessments and other charges paid or payable in connection with
or
in respect of such judgments, fines, penalties or amounts paid in settlement)
of
such action, suit or proceeding.
(f) Reviewing
Party: shall mean (i) the Board of Directors (provided that a
majority of directors are not parties to the claim), (ii) a person or body
selected by the Board of Directors and (iii) if there has been a Change in
Control, the special, independent counsel referred to in subsection 3(b)
hereof.
2.0
INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
Subject
to the limitations set forth herein and in Section 3 hereof, the Company hereby
agrees to indemnify Indemnitee as follows:
(a) Basic
Indemnification. The Company shall hold harmless and indemnify
Indemnitee to the fullest extent authorized or permitted (i) by the General
Corporation Law of the State of Delaware, or any other applicable law, the
Company's Certificate of Incorporation or Bylaws as in effect on the date
hereof, or (Ii) by any amendment thereof or other statutory provisions
authorizing or permitting such indemnification which is adopted after the date
hereof.
(b) Additional
Indemnification. Without limiting the generality of subsection (a)
hereof, in the event Indemnitee was, is or becomes a Participant in a Claim
by
reason of (or arising in part out of) an lndemnifiable Event, the Company shall
indemnify Indemnitee to the fullest extent permitted by law, as soon as
practicable after written demand is presented to the Company, against any and
all Expenses and Losses.
(c) Advancement
of Expenses. In the event
Indemnitee is, was or becomes a Participant in any Claim by reason of an
Indemnifiable Event, if so requested by Indemnitee, the Company shall advance
any and all such Expenses to Indemnitee.
3.0
GENERAL LIMITATIONS ON INDEMNIFICATION.
(a) Determination
of Reviewing Party.
Notwithstanding
the foregoing, (i) the obligations of the Company set
forth in Section 2 hereof (except with respect to Expense advances made prior
to
any determination by a Reviewing Party referred to below that Indemnitee
substantively would not be permitted to be indemnified for Claims for
Indemnifiable Events with respect to which such advances are being made) shall
be subject to the condition that the Reviewing Party shall not have determined
(in a written opinion, in any case in which the special, independent counsel
referred to in subsection (b) hereof is involved) that Indemnitee would not
be
permitted to be so indemnified under applicable law, and (ii) if, when and
to
the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid (unless Indemnitee has commenced
legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee should be indemnified under applicable law, in which event
Indemnitee shall not be required to so reimburse the Company until a final
judicial determination is made with respect thereto as to which all rights
of
appeal therefrom have been exhausted or lapsed) and shall not be obligated
to
indemnify or advance any additional amounts to Indemnitee (unless there has
been
a determination by a court of competent jurisdiction that the Indemnitee would
be permitted to be so indemnified under applicable law).
If
there
has been no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall have
the
right to commence litigation in any court in the States of Missouri or Delaware
having subject matter jurisdiction thereof and in which venue is proper seeking
an order or judgment by the court equivalent to the determination of the
Reviewing Party or challenging any such determination by the Reviewing Party
or
any aspect thereof; any determination by the Reviewing Party otherwise shall
be
conclusive and binding on the Company and Indemnitee.
The
Company agrees to pay the reasonable fees of the special, independent counsel
referred to above and to fully indemnify such counsel against any and all
Expenses and Losses arising out of or relating to this Agreement or its
engagement pursuant hereto.
4.0
INSURANCE.
(a) Maintenance
of Existing
Insurance.
The
Company represents that
it presently has in place certain policies of directors' and officers' liability
insurance of such insurance companies and in such amounts as set forth in
Schedule A attached hereto. Subject only to the provisions within this Section
4, the Company agrees that so long as the Indemnitee shall continue to serve
as
a director, officer, employee, agent or fiduciary of the Company, or shall
continue at the request of the Company to serve as a director, officer,
employee, trustee, agent or fiduciary of another corporation, partnership,
joint
venture, trust or other enterprise, and thereafter so long as the Indemnitee
shall be subject to any possible claim or threatened, pending or completed
action, suit or proceeding or any inquiry or investigation, whether civil,
criminal or investigative, arising out of the Indemnitee's tenure as a director,
officer, employee, agent or fiduciary of the Company (such periods being
hereinafter sometimes referred to as the "Indemnification Period"), the Company
will purchase and maintain in effect for the benefit of the Indemnitee one
or
more valid, binding and enforceable policy or policies of directors' and
officers' liability insurance providing, in all respects, coverage both in
scope
and amount which is no less favorable than that presently provided pursuant
to
the policies set forth in Schedule A.
(b) Limitations
on Maintenance of
Insurance. The
Company shall not be required to maintain said policy or policies of directors'
and officers' liability insurance as set forth in subsection (a) of this Section
4 if such insurance is not reasonably available or if it is in good faith
determined by the then directors of the Company either that (i) the premium
cost
of maintaining such insurance is substantially disproportionate to the amount
of
coverage provided thereunder or (ii) the protection provided by such insurance
is so limited by exclusions, deductions or otherwise that there is insufficient
benefit to war-rant the cost of maintaining such insurance policies. Anything
in
this Agreement to the contrary notwithstanding, to the extent that and for
so
long as the Company shall choose to continue to maintain any policy or policies
of directors' and officers' liability insurance during the Indemnification
Period, the Company shall be required to maintain similar and equivalent
insurance policies for the benefit of the Indemnitee during the Indemnification
Period (whether more or less favorable to Indemnitee than the Company's existing
policies).
(c)
Additional Indemnification
in Lieu of
Insurance. In the event (i) the Company
shall discontinue any policy or policies of directors' and officers' liability
insurance providing the coverages specified in subsection (a) of this Section
4
or limit in any way the coverages provided thereunder either in scope or amount,
or (ii) such policies or the coverages provided thereunder become unavailable
in
whole or in part for any reason, the Company agrees to hold harmless and
indemnify the Indemnitee for the remainder of the Indemnification Period to
the
full extent of the coverage which would otherwise have been provided for the
benefit of the Indemnitee had such insurance policies specified in subsection
(a) been maintained, unless the Indemnitee is otherwise protected by any
insurance coverage maintained by the Company for the benefit of the Indemnitee
in which event the indemnity provided by this subsection (c) shall be
inapplicable to the extent, but only to the extent, of such
coverage.
5.0
NO MODIFICATION.
No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any
other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
6.0
SUBROGATION.
In
the
event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who
shall
execute all papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such
rights.
7.0
REIMBURSEMENT.
The
Company shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee to the extent Indemnitee
has
otherwise actually received payment (under any insurance policy, Bylaw or
otherwise) of the amounts otherwise indemnifiable hereunder.
8.0
EFFECTIVENESS.
This
Agreement shall be of full force and effect immediately upon its execution;
provided, however, that the Board of Directors of the Company
intends to place this Agreement before the Shareowners of the Company at the
next annual meeting of Shareowners for ratification, and if Shareowners of
the
Company fail to ratify this Agreement at such meeting, the Company shall have
the right in its sole discretion to terminate this Agreement. Upon any such
termination this Agreement will be of no further force or effect.
9.0
NOTIFICATION AND DEFENSE OF CLAIM.
Promptly
after receipt by
Indemnitee of notice of the commencement of any action, suit or proceeding,
Indemnitee will, if a Claim in respect thereof is to be made against the Company
under this Agreement, notify the Company of the commencement thereof; but the
omission so to notify the Company will not relieve it from any liability which
it may have to Indemnitee otherwise than under this Agreement. With respect
to
any such action, suit or proceeding as to which Indemnitee notifies the Company
of the commencement thereof:
(a) the
Company will be entitled to participate therein at its own expense;
and
(b) except
as
otherwise provided below, to the extent that it may wish, the Company jointly
with any other indemnifying party similarly notified will be entitled to assume
the defense thereof, with counsel satisfactory to Indemnitee. After notice
from
the Company to Indemnitee of its election to assume the defense thereof, the
Company will not be liable to Indemnitee under this Agreement for any legal
or
other expenses subsequently incurred by Indemnitee in connection with the
defense thereof other than reasonable costs of investigation or as otherwise
provided below. Indemnitee shall have the right to employ its counsel in such
action, suit or proceeding, but the fees and expenses of such counsel incurred
after notice from the Company of its assumption of the defense thereof shall
be
at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee
has been authorized by the Company, (ii) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
the
Indemnitee in the conduct of the defense of such action or (iii) the Company
shall not in fact have employed counsel to assume the defense of such action,
in
each of which cases the fees and expenses of counsel shall be at the expense
of
the Company. The Company shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of the Company or as to
which
the Indemnitee shall have made the conclusion provided for in (ii)
above.
(c) the
Company shall not be liable to indemnify the Indemnitee under this Agreement
for
any amounts paid in settlement of any action or claim effected without its
writ-ten consent. The Company shall not settle any action or claim in any manner
which would impose any penalty or limitation on the Indemnitee without the
Indemnitee's written consent. Neither the Company nor the Indemnitee will
unreasonably withhold their consent to any proposed settlement.
10.0
NON-EXCLUSIVITY.
The
rights of the Indemnitee hereunder shall not be deemed exclusive of any other
rights he may have under the Company's Bylaws or the Delaware General
Corporation Law or otherwise, and to the extent that during the Indemnification
Period the rights of the then existing directors and officers are more favorable
to such directors or officers than the rights currently provided thereunder
or
under this agreement to Indemnitee, Indemnitee shall be entitled to the full
benefits of such more favorable rights.
11.0
BINDING EFFECT.
This
Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs
and personal and legal representatives. This Agreement shall continue in effect
during the Indemnification Period, regardless of whether Indemnitee continues
to
serve as an officer or director of the Company or of any other enterprise at
the
Company’s request.
12.0
SEVERABILITY.
The
provisions of this Agreement shall be severable in the event that any provision
hereof (including any provision within a single section, paragraph or sentence)
is held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable, and the remaining provisions shall remain enforceable to the
fullest extent permitted by law.
13.0
GOVERNING LAW.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Delaware.
14.0
ENTIRE AGREEMENT AND TERMINATION.
This
Agreement represents
the entire agreement between the parties; and there are no other agreements,
contracts or understandings between the parties with respect to the subject
matter of this Agreement. No termination or cancellation of this Agreement
(except by the Company pursuant to Section 8 hereof) shall be effective unless
in writing and signed by both parties hereto.
| Executed this | day of |
,
|
1986. | |
| SOUTHWESTERN XXXX CORPORATION | ||||
| By | |
| Xxxx X. Xxxxxx, Chairman and Chief Executive Officer |
| By | |
| lndemnitee |
