INDEMNIFICATION AGREEMENT
Exhibit
10.54
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made as of , 2005 by and
between Sunrise Senior Living, Inc., a Delaware corporation (the “Company”), and *
(“Indemnitee”), a director and/or officer of the Company.
WHEREAS, Section 6 of the Amended and Restated Bylaws of the Company, as amended (the
“Bylaws”), provides that the Company, among other things, shall indemnify and hold harmless each
person who was or is a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative and whether by or in the right of the Company or otherwise, by
reason of the fact that he or she is or was an officer or director of the Company or is or was
serving at the request of the Company as an officer, director, employee, partner (limited or
general) or agent of another corporation or of a partnership, joint venture, limited liability
company, trust, or other enterprise; and
WHEREAS, in recognition of Indemnitee’s need for protection against personal liability in
order to enhance Indemnitee’s continued service to the Company and Indemnitee’s reliance on the
provisions of Section 6 of the Bylaws requiring indemnification under certain circumstances, and in
part to provide Indemnitee with specific contractual assurance that indemnification protection will
be available and to implement such Bylaw provision, the Company wishes to provide in this Agreement
for the indemnification of, and the advancement of expenses to, Indemnitee to the fullest extent
permitted by law.
NOW, WHEREAS, in consideration of the mutual premises and covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Right to Indemnification. The Company shall to the fullest extent
permitted by applicable law in effect on the date hereof or as such law may from time to time be
amended indemnify and hold harmless the Indemnitee in the event that he or she was or is a party to
or is involved or becomes involved in any manner (including, without limitation, as a party,
intervenor or a witness) or is threatened to be made so involved in any threatened, pending or
completed investigation, claim, action, suit, arbitration, alternate dispute resolution mechanism,
inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether
civil, criminal, administrative or investigative (including without limitation, any action, suit or
proceeding by or in the right of the Company to procure a judgment in its favor) (a “Proceeding”)
by reason of the fact that he or she, or a person of whom he or she is the legal representative, is
or was a director and/or officer of the Company, or is or was serving at the request of the Company
as a director, officer, partner (limited or general) or agent of another corporation, partnership,
joint venture, limited liability company, trust or other enterprise, including, without limitation,
any subsidiary of the Company (including, without limitation,
| * | See Schedule A for a list of officers and directors who have entered into this Indemnification Agreement with the Company. |
service with respect to an employee benefit plan), against all expenses, liabilities and losses,
including attorneys’ fees, judgments, fines (including any excise taxes assessed on a person with
respect to an employee benefit plan), taxes, penalties and amounts paid or to be paid in settlement
(collectively, “Losses”), actually and reasonably incurred by him or her in connection with such
Proceeding. Such indemnification shall be a contract right and shall include the right to receive
payment in advance of any expenses incurred by the Indemnitee in connection with such Proceeding,
consistent with the provisions of applicable law as then in effect. If Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for some or a portion of
the Losses actually and reasonably incurred by Indemnitee in a Proceeding, but not, however, for
the total amount thereof, the Company shall indemnify Indemnitee for the portion of such Losses to
which Indemnitee is entitled.
SECTION 2. Indemnification; Not Exclusive Right. The right of indemnification
provided in this Agreement shall not be exclusive of and shall be in addition to, and not in lieu
of, any other rights to which the Indemnitee may otherwise be entitled under applicable law, the
Bylaws, the Company’s certificate of incorporation, as amended, or otherwise. Nothing in this
Agreement shall diminish or otherwise restrict the Indemnitee’s right to indemnification under
applicable law, the Bylaws, the Company’s certificate of incorporation, as amended, or otherwise.
The rights conferred upon Indemnitee by this Agreement shall continue after Indemnitee has ceased
to be a director or officer of the Company, or to serve at the request of the Company as a
director, officer, partner (limited or general), or agent of another corporation, partnership,
joint venture, limited liability company, trust or other enterprise and the provisions of this
Agreement shall inure to the benefit of the heirs, executors, administrators and other legal
representatives of the Indemnitee and shall be applicable to Proceedings commenced or continuing
after the adoption of this Agreement, whether arising from acts or omissions occurring before or
after its execution and delivery.
SECTION 3. Advancement of Expenses; Procedures; Presumptions and Effect of Certain
Proceedings; Remedies. In furtherance, but not in limitation of the foregoing provisions, the
following procedures, presumptions and remedies shall apply with respect to the advancement of
expenses and the right to indemnification under this Agreement:
3(a) Advancement of Expenses. All reasonable expenses (including attorneys’ fees)
incurred by or on behalf of the Indemnitee in the defense of or other involvement in or otherwise
in connection with any Proceeding shall be advanced to the Indemnitee by the Company within twenty
(20) days after the receipt by the Company of a statement or statements from the Indemnitee
requesting such advance or advances from time to time, whether prior to or after final disposition
of such Proceeding. Such statement or statements shall reasonably evidence the expenses incurred
by the Indemnitee and shall include or be accompanied by an undertaking by or on behalf of the
Indemnitee to repay the amounts advanced if it should ultimately be determined that the Indemnitee
is not entitled to be indemnified against such expenses pursuant to this Agreement.
3(b) Procedure for Determination of Entitlement to Indemnification.
(i) To obtain indemnification under this Agreement, the Indemnitee shall submit to the
Secretary of the Company a written request, including such documentation
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and information as is reasonably available to the Indemnitee and reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to indemnification (the “Supporting
Documentation”). The determination of the Indemnitee’s entitlement to indemnification shall be
made not later than sixty (60) days after receipt by the Company of the written request for
indemnification together with the Supporting Documentation. The Secretary of the Company shall,
promptly upon receipt of such a request for indemnification, advise the Board of Directors of the
Company (the “Board of Directors”) in writing that the Indemnitee has requested indemnification.
(ii) The Indemnitee’s entitlement to indemnification under this Agreement shall be determined
in one of the following ways: (A) by a majority vote of the Disinterested Directors (as hereinafter
defined), even though less than a quorum of the Board of Directors; (B) by a committee of such
Disinterested Directors designated by a majority vote of such Disinterested Directors, even though
less than a quorum of the Board of Directors; (C) by a written opinion of Independent Counsel (as
hereinafter defined) if (x) a Change of Control (as hereinafter defined) shall have occurred and
the Indemnitee so requests or (y) there are no Disinterested Directors, or a majority of
Disinterested Directors, even though less than a quorum, so directs; (D) by the stockholders of the
Company (but only if a majority of the Disinterested Directors, even though less than a quorum of
the Board of Directors, presents the issue of entitlement to indemnification to the stockholders
for their determination); or (E) as provided in Section 3(c).
(iii) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 3(b)(ii), a majority of the Disinterested Directors, or in
the absence of any Disinterested Directors, a majority of the Board of Directors, shall select the
Independent Counsel, but only an Independent Counsel to which the Indemnitee does not reasonably
object; provided, however, that if a Change of Control shall have occurred, the Indemnitee shall
select such Independent Counsel, but only an Independent Counsel to which the Board of Directors
does not reasonably object.
3(c) Presumptions and Effect of Certain Proceedings. Except as otherwise expressly
provided in this Agreement, the Indemnitee shall be presumed to be entitled to indemnification
under this Agreement upon submission of a request for indemnification together with the Supporting
Documentation in accordance with Section 3(b)(i), and thereafter the Company shall have the burden
of proof to overcome that presumption in reaching a contrary determination. In any event, if the
person or persons empowered under Section 3(b) to determine entitlement to indemnification shall
not have been appointed or shall not have made a determination within sixty (60) days after receipt
by the Company of the request therefor together with the Supporting Documentation, the Indemnitee
shall be deemed to be entitled to indemnification and shall be entitled to such indemnification
unless (A) the Indemnitee misrepresented or failed to disclose a material fact in making the
request for indemnification or in the Supporting Documentation or (B) such indemnification is
prohibited by law. The termination of any Proceeding described in Section l, or of any claim,
issue or matter herein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, adversely affect the right of the Indemnitee to
indemnification or create a presumption that the Indemnitee did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best interests of the
Company or, with respect
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to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his or
her conduct was unlawful.
3(d) Remedies of Indemnitee.
(i) In the event that a determination is made pursuant to Section 3(b) that the Indemnitee is
not entitled to indemnification under this Agreement, the Indemnitee shall be entitled to seek an
adjudication of his or her entitlement to such indemnification either at the Indemnitee’s sole
option, in (x) an appropriate court of the State of Delaware or any other court of competent
jurisdiction or (y) an arbitration to be conducted by a single arbitrator pursuant to the rules of
the American Arbitration Association; it being understood that any such judicial proceeding or
arbitration shall be de novo and the Indemnitee shall not be prejudiced by reason of such adverse
determination; and in any such judicial proceeding or arbitration the Company shall have the burden
of proving that the Indemnitee is not entitled to indemnification under this Agreement.
(ii) If a determination shall have been made or deemed to have been made, pursuant to Sections
3(b) or (c), that the Indemnitee is entitled to indemnification, the Company shall be obligated to
pay the amounts constituting such indemnification within five (5) days after such determination has
been made or deemed to have been made and shall be conclusively bound by such determination unless
(A) the Indemnitee misrepresented or failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (B) such indemnification is prohibited by
law. In the event that advancement of expenses is not timely made pursuant to Section 3(a) or
payment of indemnification is not made within five (5) days after a determination of entitlement to
indemnification has been made or deemed to have been made pursuant to Section 3(b) or (c), the
Indemnitee shall be entitled to seek judicial enforcement of the Company’s obligation to pay to the
Indemnitee such advancement of expenses or indemnification. Notwithstanding the foregoing, the
Company may bring an action in the Court of Chancery in the State of Delaware (or in any other
state court of Delaware if it is determined that the Court of Chancery does not have jurisdiction
over such action) contesting the right of the Indemnitee to receive indemnification hereunder due
to the occurrence of an event described in subclause (A) or (B) of this clause (ii) (a
“Disqualifying Event”); provided, however, that in any such action the Company shall have the
burden of proving the occurrence of such Disqualifying Event.
(iii) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 3(d) that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.
(iv) In the event that the Indemnitee, pursuant to this Section 3(d), seeks a judicial
adjudication of or an award in arbitration to enforce his or her rights under, or to recover
damages for breach of, this Agreement, the Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, any expenses (including attorneys’ fees)
actually and reasonably incurred by him or her if the Indemnitee prevails in such judicial
adjudication or arbitration. If it shall be determined in such judicial adjudication or
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arbitration that the Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses sought, all such expenses (including attorneys’ fees) actually and
reasonably incurred by the Indemnitee in connection with such judicial adjudication or arbitration
shall be paid.
3(e) Definitions. For the purposes of this Section 3:
(i) “Change in Control” means a change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the Company is
then subject to such reporting requirement; provided that, without limitation, such a change in
control shall be deemed to have occurred if (A) any “person” (as such term is used in Sections
13(d) and 14(d) of the Act) becomes after the date hereof the “beneficial owner” (as defined in
Rule l3d-3 under the Act), directly or indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding
securities without the prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such acquisition; (B) the Company is a party to a merger,
consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors thereafter or (C) during any period of
two (2) consecutive years, individuals who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose election or nomination for election by
the Company’s stockholders was approved by a vote of at least a majority of the directors then
still in office who were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.
(ii) “Disinterested Director” means a director of the Company who is not or was not a party to
the Proceeding in respect of which indemnification is sought by the Indemnitee.
(iii) “Independent Counsel” means a law firm or a member of a law firm that neither presently
is, nor in the past five (5) years has been, retained to represent (A) the Company or the
Indemnitee in any matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, or of other individuals who are “indemnities” under
similar indemnification agreements) or (B) any other party to the Proceeding giving rise to a claim
for indemnification under this Agreement. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of professional conduct
then prevailing under the laws of the State of Delaware or any other applicable law, would have a
conflict of interest in representing either the Company or the Indemnitee in an action to determine
the Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the
Independent Counsel referred to above and to fully indemnify such counsel against any and all
expenses, claims, liabilities and damages arising or relating to this Agreement or its engagement
pursuant hereto.
SECTION 4. Notification and Defense of Claim. Promptly after receipt of notice of the
commencement of any action, suit or proceeding, Indemnitee will, if a claim in respect thereof is
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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 the Company from any liability
that the Company may have to Indemnitee under this Agreement unless the Company is materially
prejudiced thereby. With respect to any such action, suit or proceeding as to which Indemnitee
notifies the Company of the commencement thereof:
4(a) The Company will be entitled to participate therein at its own expense; and
4(b) Except as otherwise provided below, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee. After notice from the Company to Indemnitee of the Company’s election
so 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 Indemnitee’s own counsel in such action, suit or proceeding, but the
fees and disbursements of such counsel incurred after notice from the Company of the Company’s
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 Indemnitee in the
conduct of the defense of such action, (iii) such action, suit or proceeding seeks penalties or
other relief against Indemnitee with respect to which the Company could not provide monetary
indemnification to Indemnitee (such as injunctive relief or incarceration) or (iv) the Company
shall not in fact have employed counsel to assume the defense of such action, in each of which
cases the fees and disbursements 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 Indemnitee shall have reached the conclusion specified in
(ii) above, or which involves penalties or other relief against Indemnitee of the type referred to
in (iii) above.
4(c) The Company shall not be liable to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any action or claim effected without the Company’s prior written
consent. The Company shall not settle any action or claim in any manner that would impose any
fine, penalty, limitation or obligation on Indemnitee without Indemnitee’s prior written consent.
Neither the Company nor Indemnitee will unreasonably withhold its, or his or her, respective
consent to any proposed settlement.
SECTION 5. Exception. Notwithstanding any provision in this Agreement to the
contrary, the Company shall not be obligated under this Agreement to indemnify Indemnitee (or to
advance expenses to Indemnitee) in connection with any claim made against Indemnitee with respect
to any Proceeding or other proceedings or claims brought voluntarily by the Indemnitee and not by
way of defense, except with respect to any Proceeding or other proceedings or claims brought to
establish or enforce a right to indemnification or advancement of expenses under this Agreement or
any other statute or law or otherwise as required under Section 145 of the Delaware General
Corporation Law, but such indemnification or advancement of expenses may be provided by the Company
in specific cases if the Board of Directors (or a committee thereof) finds it to be appropriate.
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SECTION 6. Severability; Prior Indemnification Agreements. If any provision or
provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, all portions of any paragraph of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (b) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held invalid, illegal or
unenforceable. This Agreement shall supersede and replace any prior indemnification agreements
entered into by and between the Company and the Indemnitee and any such prior agreements shall be
deemed automatically terminated upon execution and delivery of this Agreement by the Company and
the Indemnitee; provided, however, that nothing in this Agreement shall replace the contract rights
conferred upon Indemnitee in the Company’s Bylaws to the extent such rights differ from the rights
provided in this Agreement.
SECTION 7. Company’s Right to Indemnification. Nothing in this Agreement shall
diminish, limit or otherwise restrict or modify in any way the Company’s right to indemnification
or contribution from an Indemnitee or an Indemnitee’s obligation to indemnify or hold harmless the
Company under any agreement, instrument, commitment or understanding now or hereafter in effect.
SECTION 8. Cancellation. The Company may cancel the provisions of this Agreement
prospectively only upon thirty (30) days’ prior written notice to Indemnitee, in order to afford
Indemnitee an opportunity to resign as officer and/or director rather than continue to serve absent
indemnification provided under this Agreement; it being understood that “prospectively only” shall
mean that the Agreement shall remain in full force and effect for all acts or omissions that occur
through the effective date of cancellation. Notwithstanding the foregoing, this Agreement does not
create any obligation on the part of the Company to continue the Indemnitee as an employee, officer
or director of the Company, as applicable, and shall not be deemed an employment contract between
the Company and the Indemnitee, as applicable, and, if the Indemnitee is an employee or officer of
the Company, Indemnitee specifically acknowledges that Indemnitee may be discharged at any time for
any reason, with or without cause, and with or without severance compensation, except as may be
otherwise provided in a separate written contract between Indemnitee and the Company.
SECTION 9. Amendments and Waiver. No amendment, modification or discharge or this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly
executed by both of the parties hereto. Neither the waiver by any of the parties hereto of a breach
of or a default under any of the provisions of this Agreement, nor the failure of any of the
parties, on one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder shall thereafter be construed as a waiver of any
subsequent breach or default of a similar nature, or as a waiver of any of such provisions, rights
or privileges hereunder. No delay or failure on the part of any party in exercising any right,
power or privilege under this Agreement or under any other instruments given in connection with
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or pursuant to this Agreement shall impair any such right, power or privilege or be construed
as a waiver of any default or any acquiescence therein. No single or partial exercise of any such
right, power or privilege shall preclude the further exercise of such right, power or privilege, or
the exercise of any other right, power or privilege.
SECTION 10. Liability Insurance. To the extent that the Company maintains an
insurance policy providing liability insurance for directors and officers of the Company or for
directors, officers, employees, agents or fiduciaries of any other corporation, partnership, joint
venture, limited liability company, trust, employee benefit plan or other enterprise for which such
person serves at the request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage available for any
director, officer, employee, agent or fiduciary under such policy or policies (as applicable to the
capacity(ies) in which such Indemnitee serves). If, at the time of the receipt of a notice of a
Proceeding pursuant to the terms hereof, the Company has director and officer liability insurance
in effect, the Company shall give prompt notice of the commencement of such Proceeding to the
insurers in accordance with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such
policies.
SECTION 11. 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 and delivery of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
SECTION 12. No Duplication of Payment. 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 provision or
otherwise) of the amounts otherwise indemnifiable hereunder.
SECTION 13. Governing Law; Consent to Jurisdiction; Headings. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws. Except as set forth in Section 3(d) with respect to Indemnitee’s
right to arbitration, the Company and the Indemnitee hereby irrevocably consent to the jurisdiction
of the courts of the State of Delaware for all purposes in connection with any action, suit or
proceeding which arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be brought only in the Court of Chancery in the State of Delaware (or in
any other state court of Delaware if it is determined that the Court of Chancery does not have
jurisdiction over such action). The section and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning of interpretation of this
Agreement.
SECTION 14. Counterparts. This Agreement may be executed and delivered in or more
counterparts, each of which shall constitute an original.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement or have
caused this Agreement to be executed and delivered as of the day and year first above written.
| SUNRISE SENIOR LIVING, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| INDEMNITEE | ||||||
| By: | ||||||
| Name: | ||||||
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Schedule A
Each of
the following officers and directors of the Company has entered into
a separate Indemnification Agreement
with the Company:
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxx
Xxxx Jasnoff
Xxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
J. Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxx
Xxxx Jasnoff
Xxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
J. Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxx
Each Indemnification Agreement is dated as of April 4, 2005.
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