EXHIBIT 10.3
OFFICER INDEMNIFICATION AGREEMENT
This Agreement, dated as of __________ ___, 199__ is entered into between
Xxxxxxx Education Group, Inc., a corporation organized under the laws of the
State of Florida (the "Company"), and _____________________ (the "Officer").
RECITALS
A. Highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or as executive officers unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to, and activities on behalf of, the corporation.
B. The current impracticability of obtaining adequate insurance and the
uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons.
C. The Bylaws of the Company presently provide, among other things, that
the Company shall indemnify its directors and officers to the full extent
permitted by law.
D. The Board has determined that the difficulty in attracting and retaining
highly competent persons is detrimental to the best interests of the Company's
shareholders and that the Company should act to assure such persons that there
will be increased certainty of protection against risks of such claims and
actions against them in the future.
E. It is reasonable, prudent, and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.
F. The Officer is willing to serve or continue to serve as an officer of
the Company on the condition that the Officer be so indemnified.
AGREEMENT
In consideration of the recitals and the covenants contained herein, the
Company and the Officer covenant and agree as follows:
1. DEFINITIONS. As used in this Agreement the following terms shall have
the meanings indicated below:
(a) "Related Party" shall refer to (i) any other corporation in which the
Company has an equity interest of at least fifty percent (50%) and (ii) any
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other corporation or any limited liability company, partnership, joint
venture, trust, employee benefit plan or any other enterprise or association in
which the Officer has served in any Indemnified Position, at the request of the
Company or for the convenience of the Company or to represent the Company's
interest. Any entity or plan described in Section 1(a)(ii) in which the Company
has any interest or which is established in whole or in part for the benefit of
the Company or any other Related Party or the Company or Related Party's
employees shall be presumed to be a Related Party.
(b) "Indemnified Position" shall refer to any position held by the Officer,
or pursuant to which the Officer acts, as an officer, director, employee,
partner, trustee, fiduciary, administrator or agent of the Company or a Related
Party.
(c) "Indemnified Event" shall mean any claim asserted against the Officer,
whether civil, criminal, administrative or investigative in nature, for monetary
or other relief; or any Proceeding to which the Officer is named as a party or
is a subject of or witness in, or with respect to which he or she is threatened
to be named as a party, subject to witness, brought against the Officer by
reason or his or her serving or acting in any Indemnified Position or arising or
allegedly arising directly or indirectly out of, or otherwise relating to, any
action, omission, occurrence or event involving the Officer in any Indemnified
Position, including any Proceeding, formal or informal or otherwise, conducted
or brought by the Securities and Exchange Commission or other governmental
agency, or The National Association of Securities Dealers, Inc., a national
stock exchange or similar organization.
(d) "Proceeding" shall mean any pending, threatened or completed action,
suit, investigation, inquiry, arbitration, alternative dispute resolution
mechanism or any other proceeding (or any appeals therefrom), whether civil,
criminal, administrative or investigative in nature and whether in a court or
arbitration, or before or involving a governmental, administrative or private
entity (including, but not limited to, an investigation initiated by the
Company, any related Party or any affiliate thereof, or the board of directors,
fiduciaries or partners of any thereof).
(e) "Indemnification Amount" shall refer to the amount of losses, claims,
demands, costs, damages, liabilities (joint and several), judgments, fines
(including any excise tax assessed with respect to an employee benefit plan),
settlements, and other amounts (including Witness Liabilities), including
interest on any of the foregoing, which the Officer is liable to pay or has paid
in connection with an Indemnified Event and amounts proposed to be paid in
settlement by the Officer in connection with any Indemnified Event.
(f) "Witness Liabilities" shall mean all Indemnification Amounts incurred
by the Officer in connection with his or her preparation to serve or service as
a witness in any Proceeding in any way relating to the Company, any Related
Party or any affiliate (as defined in Rule 405 under the Securities Act of 1933,
as amended) of any of them (a "Securities Act Affiliate"), any associate (as
defined in such Rule 405) of any of them or of any Securities Act Affiliate, or
any Indemnified Event (including, but not limited to, the investigation, defense
or appeal in connection with any such Proceeding).
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(g) "Expenses" shall refer to all disbursements, costs or expenses of any
nature reasonably incurred by the Officer directly or indirectly in connection
with an Indemnified Event, or Witness Liabilities, including, but not limited
to, fees and disbursements of counsel, accountants or other experts employed by
the Officer in connection with any Indemnified Event, including all such
expenses, disbursements and costs of investigation in connection with or prior
to the initiation of any Proceeding relating to an Indemnified Event.
(h) "Indemnify" or "Indemnification" shall refer to the obligation of the
Company herein to pay Expenses or Indemnification Amounts.
(i) A "Change of Control" shall be deemed to have occurred if (A) any
"Person" (as that term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), but excluding the Company and any of its
wholly-owned subsidiaries, is or becomes (except in a transaction approved in
advance by the Board) the beneficial owner (a defined in Rule 13d-3 under such
Act), directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding securities
or (B) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute
at least a majority thereof unless the election, or the nomination for election
by the Company's shareholders, of each new director was approved by a vote of at
least two-thirds of the directors still in office who were directors at the
beginning of the period, or (C) the shareholders of the Company should approve
any one of the following transactions: (x) any consolidation or merger of the
Company in which the Company is not the surviving corporation, other than a
merger of the Company in which the holders of the Company's common stock
immediately prior to the merger have the same proportionate ownership of the
surviving corporation immediately after the merger; or (y) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, the assets of the Company.
(j) "Final Disposition" shall refer to any judgment, order or award
rendered in any Proceeding after the expiration of all rights of appeal.
2. SERVICES TO THE COMPANY. The Officer will serve, and/or continue to
serve, as an officer of the Company, so long as he or she is duly elected and
qualified in accordance with the provisions of the Articles of Incorporation and
Bylaws of the Company, or in any other Indemnified Position, at the will of the
Company (or under separate contract, if any); provided that the Officer may at
any time and for any reason resign from such Indemnified Position (subject to
any contractual obligations which the Officer shall have assumed apart from this
Agreement) but the obligations provided for herein shall continue after such
termination.
3. INDEMNITY. The Company hereby agrees to indemnify the Officer and hold
the Officer harmless to the full extent permitted or authorized by the
provisions of current Florida legislation (including Sections 607.0850(7) and
(9) of the Florida Business Corporation Act) or future Florida legislation or,
if broader indemnification is available, by current or future judicial or
administrative decisions (but, in the case of any such future legislation or
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decisions, only to the extent that it permits the Company to provide
broader indemnification rights than permitted prior to such legislation or
decisions), and such Indemnification shall be made unless prohibited by Florida
law. Without limiting the generality of the foregoing, the Company agrees to
indemnify the Officer and hold the Officer harmless from and against, and pay
any and all, Expenses and Indemnification Amounts, including Witness
Liabilities.
Except with respect to the indemnification specified in the second and
third sentences of Section 7 or in Section 10 or Section 13(b) of this
Agreement, the Company shall indemnify the Officer in connection with a
Proceeding (or part thereof) initiated by the Officer (subject to the
limitations provided above) only if authorization for the Proceeding (or part
thereof) was not denied by the Board of Directors of the Company prior to the
earlier of (i) 60 days after receipt of notice thereof from the Officer and (ii)
a Change of Control.
4. PAYMENT OF EXPENSES. The Company shall advance all Expenses within
thirty (30) days after the receipt by the Company of a statement or statements
from the Officer requesting such advance payment or payments from time to time.
Such statement or statement shall identify the nature and amount of the Expenses
to be advanced with reasonable specificity. The Officer agrees to repay any
Expenses advanced if it shall ultimately be determined (which shall only be made
after the Final Disposition of the Proceeding related to an Indemnified Event,
as hereinafter provided) that the Officer was not entitled to reimbursement of
Expenses in connection with the Indemnified Event for which such Expenses were
made.
5. INTERVAL PROTECTION. During the interval between the Company's receipt
of the Officer's request for indemnification or advances and the latest to occur
of (a) payment in full to the Officer of the indemnification or advances to
which he or she is entitled hereunder, or (b) a final adjudication that the
Officer is not entitled to indemnification hereunder, the Company shall provide
"Interval Protection" which, for purposes of this Agreement, shall mean the
taking of the necessary steps (whether or not such steps require expenditures to
be made by the Company at that time) to stay, pending a final determination of
the Officer's entitlement to indemnification (and, if the Officer is so
entitled, the payment thereof), the execution, enforcement or collection of any
Indemnified Amount or Expenses or any other amounts for which the Officer may be
liable (and as to which the Officer has requested indemnification hereunder) in
order to avoid the Officer's being or becoming in default with respect to any
such amounts (such necessary steps to include, but not be limited to, the
procurement of a surety bond to achieve such stay or the loan to the Officer
(unsecured and with interest payable at the prime rate) of amounts necessary to
satisfy the Indemnified Amount or Expenses or other amounts for which the
Officer maybe liable and as to which a stay of execution as aforesaid cannot be
obtained, the Company by executing this Agreement having made the judgment that,
in general, such loan or similar assistance may reasonably be expected to
benefit the Company), within three days after receipt of the Officer's written
request therefor, together with a written undertaking by the Officer to repay,
no later than 120 days following receipt of a statement therefor from the
Company, amounts (if any) expended by the Company for such purpose, if it is
ultimately determined in a final adjudication that the officer is not entitled
to be indemnified against such Indemnified Amounts or Expenses or other amounts.
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6. INDEMNIFICATION BY COURT. Notwithstanding any other provision of this
Agreement including without limitation the fourth sentence of Section 7,
indemnification and advances shall also be made to the extent a Florida circuit
court, or another court of competent jurisdiction, or the court in which a
Proceeding was brought, shall determine that the Officer, in view of all the
circumstances of the case, is fairly and reasonably entitled to indemnification
and/or advances for such Expenses as such court shall deem proper.
7. INDEMNIFICATION PROCEDURE. Any Indemnification or advance under this
Agreement (other than Interval Protection) shall be made promptly and in any
event within thirty (30) days upon the written request of the Officer delivered
to the Company. The right to Indemnification or advances as granted under this
Agreement shall be enforceable by the Officer in any court of competent
jurisdiction if the Company denies such request, in whole or in part, or if no
disposition thereof is made within thirty (30) days. The Officer's costs and
expenses incurred in connection with successfully establishing his or her right
to indemnification or advances, in whole or in part, in any such action shall
also be indemnified by the Company. It shall be a defense to any such action
that there has been a judgment or other final adjudication adverse to the
Officer which established that the Officer failed to meet the standard of
conduct, if any, required for indemnification by current legislation or, if
applicable in accordance with Section 3 hereof, future legislation or current or
future judicial or administrative decisions, but the burden of providing such
defense shall be on the Company. Neither the failure of the Company (including
the Board or any committee thereof, its independent counsel and its
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the Officer is proper in the circumstances
because he or she has met the applicable standard of conduct described in the
preceding sentence, if any, nor the fact that there has been an actual
determination by the Company (including the Board or any committee thereof, its
independent counsel and its shareholders) that the Officer has not met such
applicable standard of conduct, shall be a defense to the action to create a
presumption that the claimant has not met the applicable standard of conduct.
8. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) The Officer shall be presumed entitled to Indemnification hereunder
unless clearly not entitled to such Indemnification by clear and convincing
proof that such payment shall be unlawful.
(b) If the Company shall not have responded to the Officer's request for
Indemnification pursuant to Section 7 hereof within thirty (30) days after
receipt by the Company of such request therefor, the Officer shall be deemed to
be entitled to such Indemnification except as otherwise provided in Section 3
hereof.
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(c) The termination of any Proceeding relating to an Indemnified Event or
of any claim, issue, or matter therein 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 Officer to Indemnification or create a
presumption that the Officer did not meet any applicable standard of conduct.
(d) Notwithstanding any other provision of this Agreement, the Officer
shall in no event be required to repay any Expense payments advanced to the
Officer and no defense can or shall be raised by the Company to a request for
Indemnification pursuant to Section 7 to the extent the Officer has been
successful on the merits or otherwise in defense of any Proceeding related to an
Indemnified Event, or in defense of any claim, issue or matter involved in any
Indemnified Event therein, whether as a result of the initial adjudication or on
appeal or the abandonment thereof by a party.
9. NON-EXCLUSIVITY; DURATION OF AGREEMENT; INSURANCE; SUBROGATION.
(a) The rights of Indemnification and to receive advancement of Expenses as
provided by this Agreement shall not be deemed exclusive of any other rights to
which the Officer may at any time be entitled under applicable law, the Articles
of Incorporation, the Bylaws, any other agreement, or any vote or consent of
directors or shareholders or otherwise.
(b) This Agreement shall continue until and terminate upon the later of:
(i) ten (10) years after the date that the Officer shall have ceased to serve in
any Indemnified Position; or (ii) the Final Disposition of all Indemnified
events.
(c) This Agreement shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of the officer and his or her heirs,
devisees, executors, and administrators or other legal representatives.
(d) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors or executive officers of
the Company or for any person serving in any other Indemnified Position, the
Officer 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 such
director or executive officer or person serving in such position under such
policy or policies.
10. PROCEEDINGS.
(a) The parties hereto agree that except as otherwise provided for herein,
any disputes arising with respect to the interpretation or enforcement of any
provision thereof shall be submitted, at the sole election of the Officer,
either to arbitration or to judicial determination. Any arbitration shall be
conducted in the City of Miami, Florida in accordance with the then existing
rules of the American Arbitration Association ("AAA"). In any arbitration
pursuant to this Agreement, the award or decision shall be rendered by a
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majority chosen in accordance with the then existing rules of the AAA. The
award or decision of the arbitration panel pursuant to this Section 10 shall be
binding and conclusive on the parties, provided that enforcement of such award
or decision may be obtained in any court having jurisdiction over the party
against whom such enforcement is sought. The Company hereby agrees to bear all
fees, costs and expenses imposed by the AAA, in connection with the arbitration,
irrespective of the termination thereof. The provisions of Section 10(c) shall
govern with respect to the proceedings referred to therein.
(b) In the event that, for any reason, the Company fails to pay any
Indemnification or advance demanded, or the Company requests repayment of any
Expenses advanced, the Officer shall nevertheless be entitled, at his or her
sole option, to a final judicial determination or may seek arbitration of his or
her entitlement to Indemnification hereunder in respect of such claim. In the
event the Officer seeks a judicial determination, the Officer shall commence an
action in a court of the State of Florida. In the event the Officer seeks an
award in arbitration, (i) such arbitration shall be conducted in Miami, Florida
pursuant to Section 10(a), and (ii) the arbitrator shall notify the parties of
his or her decision within sixty (60) days following the initiation of such
arbitration (or such other period proscribed by the rules of AAA). The Company
further agrees that its execution of this Agreement shall constitute a
stipulation by which it shall be bound in any court or arbitration in which such
proceeding shall have been commenced, continued or appealed that (i) it shall
not oppose the Officer's right to seek any such adjudication or award in
arbitration or any other claim by reason of any prior determination made by the
Company with respect to the Officer's right to Indemnification under this
Agreement on such claim or any other claim, or, except in good faith, raise any
objections not specifically relating to the merits of the Officer's claim; and
(ii) for purpose of this Agreement any such adjudication or arbitration shall be
conducted de novo and without prejudice by reason of any prior determination
that the Officer is not entitled to Indemnification.
(c) Whether or not the court or arbitrators shall determine that the
Officer is entitled to payment of Indemnification Amounts or has to return the
payment of Expenses or otherwise finds against the Officer, the Company shall
within thirty (30) days after written request therefor (and submission of
reasonable evidence of the nature and amount thereof), and unless there is a
specific judicial finding that the Officer's suit or arbitration was frivolous,
pay all Expenses incurred by the Officer in connection with such adjudication or
arbitration (including, but not limited to, any appellate proceedings).
11. SEVERABILITY. 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, each portion of any Section, paragraph
or clause of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable, that is not itself 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, such portion of any Section, paragraph or clause of this
Agreement containing any such provisions held to be invalid, illegal, or
unenforceable, that is not itself invalid, illegal, or unenforceable) shall be
deemed revised, and shall be construed, so as to give effect to the intent
manifested by this Agreement (including the provision held invalid, illegal, or
unenforceable).
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12. MERGER OR CONSOLIDATION OF THE COMPANY. In the event that the Company
shall be a constituent corporation in a consolidation or merger, whether or not
the Company is the resulting or surviving corporation, the Officer shall stand
in the same position under this Agreement with respect to the Company if its
separate existence had continued.
13. ENFORCEMENT.
(a) The Company unconditionally and irrevocably stipulates and agrees that
its execution of this Agreement shall also constitute a stipulation by which it
shall be bound in any court or arbitration in which a proceeding by the Officer
for enforcement of his or her rights shall have been commenced, continued or
appealed, that the obligations of the Company set forth herein are unique and
special, and that failure of the Company to comply with the provisions of this
Agreement will cause irreparable and irremediable injury to the Officer, for
which a remedy at law will be inadequate. As a result, in addition to any other
right or remedy he or she may have at law or in equity with respect to a
violation of this Agreement, the Officer shall be entitled to injunctive or
mandatory relief directing specific performance by the Company of its
obligations under this Agreement.
(b) In the event that the Officer is subject to or intervenes in any legal
action in which the validity or enforceability of this Agreement is at issue or
institutes any legal action, for specific performance or otherwise, to enforce
his or her rights under, or to recover damages for breach of, this Agreement,
the Officer shall, within thirty (30) days after written request to the Company
therefor (and submission of reasonable evidence of the amount thereof), and
unless there is a specific judicial finding that the Officer's suit was
frivolous, be indemnified by the Company against all Expenses incurred by him or
her in connection therewith.
14. NOTIFICATION AND DEFENSE OF CLAIM. The Officer agrees to promptly
notify the Company in writing upon being served with any summons, citations,
subpoena, complaint, indictment, information or other document relating to any
Proceeding involving an Indemnification event; provided, however, that the
failure of the Officer to give such notice to the Company shall not adversely
affect the Officer's rights under this Agreement except to the extent the
Company shall have been materially prejudiced by such failure. Nothing in this
Agreement shall constitute a waiver of the Company's right to seek
participation, at its own expense, in any Proceeding which may give rise to
Indemnification hereunder.
15. HEADINGS. The headings of the Sections and paragraphs of this Agreement
are inserted for convenience only and shall be deemed to constitute part of this
Agreement or to affect the construction thereof.
16. MODIFICATION AND WAIVER. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by both of the
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parties hereto. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
17. NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand, or sent via telecopy or facsimile transmission, in each case
receipted for by the party to whom said notice or other communication shall been
directed or transmitted, or (ii) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed, or (iii) delivered by the overnight courier service:
(a) If to the Officer, to:
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(b) If to the Company, to:
Xxxxxxx Education Group, Inc.
0000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Vice President - Legal Affairs
and General Counsel
or to such other address as may have been furnished to either party by the other
party.
18. ENTIRE AGREEMENT. All prior and contemporaneous agreements and
understandings between the parties with respect to the subject matter of this
Agreement are superseded by this Agreement, and this Agreement constitutes the
entire understanding between the parties. This Agreement may not be modified,
amendment, changed or discharged except by a writing signed by the parties
hereto, and then only to the extent therein set forth.
19. NONASSIGNMENT. This Agreement may not be assigned by either of the
parties hereto.
20. GOVERNING LAW. This Agreement, including its validity, interpretation
and effect, and the relationship of the parties shall be governed by, and
construed in accordance with, the laws of the State of Florida.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the day and year first above written.
XXXXXXX EDUCATION GROUP, INC.
BY:
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XXXXXXX X. XXXXXXXXX, XX.
CHIEF EXECUTIVE OFFICER
OFFICER
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