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EXHIBIT 4
FORM OF INDEMNIFICATION AGREEMENT
AGREEMENT dated as of March 10, 2000 between Kensington
Investment Group, Inc. ("Kensington") and the undersigned nominee (the
"Indemnitee").
WHEREAS, Kensington has asked and the Indemnitee has agreed to
be a nominee for election to the Board of Directors of Xxxxx Realty Investors,
Inc. (the "Company") at the 2000 annual meeting of stockholders of the Company
(the "Annual Meeting"); and
WHEREAS, Kensington and/or its affiliates may, in appropriate
circumstances, solicit proxies from the stockholders of the Company in support
of the Indemnitee's election as a director of the Company at the Annual Meeting;
NOW, THEREFORE, in consideration of the foregoing and with the
understanding on the part of Kensington that the Indemnitee is relying on this
Agreement in agreeing to be a nominee as aforesaid and for other and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the
following defined terms have the meanings indicated below:
"Claim" means any threatened, pending or completed action,
suit or proceeding (whether civil, criminal, administrative,
formal or informal investigative or other), whether instituted
by Kensington, any stockholder of the Company, the Company or
any other party (other than by the Indemnitee), or any inquiry
or investigation that the Indemnitee in good faith believes
might lead to the institution of any such action, suit or
proceeding.
"Expenses" means all reasonable attorney's fees and all other
reasonable fees, costs, expenses and obligations paid or
incurred in connection with the election of directors at the
Annual Meeting or related matters, including without
limitation, investigating, defending or participating (as a
party, witness or otherwise) in (including on appeal), or
preparing to defend or participate in, any Claim relating to
any Indemnifiable Event.
"Indemnifiable Event" means any event or occurrence relating
to or directly or indirectly arising out of, or any action
taken or omitted to be taken in connection with the election
of directors at the Annual Meeting or related matters, but not
in the Indemnitee's capacity as a director of the Company if
the Indemnitee is so elected.
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"Loss" means any and all damages, judgments, fines, penalties,
amounts paid or payable in settlement, deficiencies, losses
and Expenses (including all interest, assessments, and other
charges paid or payable in connection with or respect of such
Losses).
2. Agreement to Serve as a Nominee. (a) The Indemnitee hereby
consents to being named as a nominee for election as a director of the Company
at the Annual Meeting (or any special meeting of the stockholders of the Company
called for that purpose) in any materials submitted by or on behalf of
Kensington to the Company or filed by or on behalf of Kensington or the Company
with the Securities and Exchange Commission, and further consents to serve as a
director of the Company if elected at the Annual Meeting (or any special meeting
of the stockholders of the Company called for that purpose), upon the
Indemnitee's reasonable satisfaction that the Company maintains customary
indemnification provisions for directors and has in effect customary insurance
coverage for directors. The indemnification provisions of this Agreement will
continue in effect even if the Indemnitee no longer serves as a director
following the Annual Meeting.
(b) Notwithstanding anything to the contrary contained in
paragraph (a) above, the Indemnitee hereby agrees with Kensington that the
Indemnitee does not and will not (unless previously approved by Kensington in
writing) consent to serve as a nominee for election as a director of the
Company, or to otherwise stand for election as or become a director of the
Company, as part of a slate of nominees proposed by any party (including the
Board of Directors of the Company or its Nominating Committee) other than
Kensington unless such slate includes a number of nominees proposed by
Kensington sufficient to constitute a majority of the members of the Board of
Directors of the Company.
3. Indemnification. (a) In the event the Indemnitee in his
capacity as nominee for election to the Company's Board of Directors at the
Annual Meeting was, is or becomes a party to or other participant in, or is
threatened to be made a party to or other participant in, a Claim by reason of
(or arising or allegedly arising in any manner out of or relating to in whole or
in part) an Indemnifiable Event or Indemnitee's being a nominee for election to
the Company's Board of Directors at the Annual Meeting, Kensington to the
fullest extent permitted by applicable law shall indemnify and hold harmless the
Indemnitee from and against any and all Losses suffered, incurred or sustained
by the Indemnitee or to which the Indemnitee becomes subject, resulting from,
arising out of or relating to such Claim (it being understood that except as
provided in Section 3(c) with respect to Expenses, reimbursements of any such
Losses shall be made as soon as practicable but in any event no later than 15
days after written request (a "Claim Notice") is made to Kensington accompanied
by supporting documentation). The Indemnitee shall give Kensington written
notice of any Claim (accompanied by such reasonable supporting documentation as
may be in the Indemnitee's possession) as soon as practicable after the
Indemnitee becomes aware thereof; provided that the failure of the Indemnitee to
give such notice shall not relieve Kensington of its indemnification
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obligations under this Agreement, except to the extent that such failure
materially prejudices the rights of Kensington.
(b) In the case of the commencement of any action against the
Indemnitee in respect of which the Indemnitee may seek indemnification from
Kensington hereunder, Kensington will be entitled to participate therein,
including, without limitation, the negotiation and approval of any settlement of
such action and, to the extent that Kensington may wish to assume the defense
thereof, with counsel reasonably satisfactory to the Indemnitee, and after
notice from Kensington to the Indemnitee of Kensington's election so to assume
the defense thereof, together with Kensington's written acknowledgement and
agreement that it will fully indemnify the Indemnitee under the terms of this
Agreement with regard to such Claim, Kensington will not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof other than reasonable costs of
investigation and preparation therefor (including, without limitation, appearing
as a witness and reasonable fees and expenses of legal counsel in connection
therewith). If in any action for which indemnity may be sought hereunder
Kensington shall not have timely assumed the defense thereof with counsel
reasonably satisfactory to the Indemnitee, or the Indemnitee shall have been
advised by counsel that it would constitute a conflict of interest for the same
counsel to represent both the Indemnitee and Kensington in such action, or if
the Indemnitee may have separate or additional defenses with regard to such
action, the Indemnitee shall have the right to employ counsel for the Indemnitee
reasonably satisfactory to Kensington in such action, in which event Kensington
shall reimburse the Indemnitee for all reasonable legal fees and expenses
incurred by the Indemnitee in connection with the defense thereof. Kensington
shall in no event be liable for any settlement of any action effected without
its prior written consent (which consent shall not be unreasonably withheld,
delayed and conditioned). Kensington shall not settle any Claim in any manner
that would impose any expense, penalty, obligation or limitation on the
Indemnitee, or would contain language other than a recitation of any amounts to
be paid in settlement, the fact of the settlement or the underlying claim
relating to the settlement, that could be viewed, in the sole discretion of the
Indemnitee, as an acknowledgement of wrongdoing on the part of the Indemnitee or
as detrimental to the reputation of the Indemnitee, without the Indemnitee's
prior written consent.
(c) The Indemnitee's right to indemnification in Section 3 of
this Agreement shall include the right of the Indemnitee to be advanced by
Kensington any Expenses incurred in connection with any Indemnifiable Event as
such Expenses are incurred by the Indemnitee; provided, however, that all
amounts advanced in respect of such Expenses shall be repaid to Kensington by
the Indemnitee if it shall ultimately be determined in a final judgment without
further right to appeal by a court of appropriate jurisdiction that the
Indemnitee is not entitled to be indemnified for such Expenses because their
Loss arose as a result of the Indemnitee's recklessness or willful misconduct.
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4. Partial Indemnity. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by Kensington for some or a
portion of any Loss, but not for all of the total amount thereof, Kensington
shall nevertheless indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful on the merits
or otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, the Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
5. No Presumptions. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval), or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
6. Nonexclusivity. The rights of the Indemnitee hereunder
shall be in addition to any other rights the Indemnitee may have under any
bylaw, insurance policy, Delaware corporate law or otherwise. To the extent that
a change in applicable law (whether by statute or judicial decision) would
permit greater indemnification by agreement than would be afforded currently
under this Agreement, it is the intent of the parties hereto that the Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by such change.
7. Amendment, etc. 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.
8. Subrogation. In the event of any payment under this
Agreement, Kensington shall be subrogated to the extent of such payment to all
of the rights of recovery of the Indemnitee, and the Indemnitee shall execute
all papers reasonably required and shall take such action that may be reasonably
necessary to secure such rights, including the execution of such documents
reasonably necessary to enable Kensington effectively to bring suit to enforce
such rights.
9. No Duplication of Payments. Kensington shall not be liable
under this Agreement to make any payment in connection with a Claim made against
the Indemnitee to the extent the Indemnitee has otherwise actually received
payment (under any insurance policy, bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder; provided that, if the Indemnitee for any
reason is required to disgorge any payment actually received, Kensington shall
be obligated to pay such amount to the Indemnitee in accordance with the other
terms of this Agreement (i.e., disregarding the terms of this Section 9).
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10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws.
11. Counterparts. This Agreement may be executed in one or
more counterparts for the convenience of the parties hereto, all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
KENSINGTON INVESTMENT GROUP, INC.
By:
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Name:
Title
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