EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made as of July 1, 1997,
by and between NORCAL WASTE SYSTEMS, INC., a California corporation (the
"Company"), and Xxxx X. Xxxxxxx ("Indemnitee") (together, the "Parties").
WHEREAS, Indemnitee is a non-employee member of the board of directors of
the Company (the "Board of Directors") who has been in the past and is
currently engaged as a consultant to the Company;
WHEREAS, the Company desires to provide Indemnitee with the maximum protection
permitted by law;
WHEREAS, Indemnitee agreed to serve and remains willing to continue to serve
and to take on additional service for or on behalf of the Company on the
condition that Indemnitee be indemnified as herein provided:
NOW, THEREFORE, the Parties hereby agree as follows:
1. Basic Indemnification Arrangement. Subject to the limitations set forth in
Section 6 and otherwise in this Agreement, the Company hereby agrees to
indemnify Indemnitee as follows:
The Company shall indemnify Indemnitee to the fullest extent permitted by law
and its articles of incorporation and bylaws in effect on the date hereof, or
as such law or articles or bylaws may from time to time be changed as provided
below, against Expenses and Liabilities actually and reasonably incurred by
Indemnitee or on his behalf in connection with the investigation, defense,
settlement or appeal of any Indemnifiable Proceeding (including an
Indemnifiable Proceeding brought by or in the right of the Company) if and
wherever Indemnitee is a party or a witness, is threatened to be made a party
or a witness or is required to produce documents or other evidence with
respect to such Indemnifiable Proceeding. With respect to a third party
action, unless no longer required by law, Indemnitee's indemnification shall
be conditioned upon Indemnitee having acted in good faith and in a manner
Indemnitee reasonably believed to be in the best interests of the Company, and
in the case of a criminal Proceeding the Company having no reasonable cause to
believe Indemnitee's acts were unlawful. With respect to a derivative action,
unless no longer required by law, Indemnitee's indemnification shall be
conditioned on Indemnitee having acted in good faith in a manner believed to
be in the best interests of the Company. Further, in the event of a
derivative action no indemnification shall be made (i) in respect of any
claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company in the performance of Indemnitee's duty to the Company
and its shareholders, unless and only to the extent that the court in which
such Proceeding is or was pending shall determine that Indemnitee is fairly
or reasonable entitled to indemnity for expenses or (ii) in respect of amounts
paid in settlement of or otherwise disposing of a threatened or pending action
without court approval, or amounts incurred in defending a pending action
which is settled or otherwise disposed of without court approval.
If, after the date of this Agreement, a change in any applicable law or the
Company's articles of incorporation or bylaws expands the Company's right to
indemnify Indemnitee, such change shall be within the purview of the Parties'
rights and obligations under this Agreement. If such a change narrows the
Company's right to indemnify Indemnitee, such change, to the extent not
otherwise required by such law, article or bylaw shall have no effect on
this Agreement or the Parties' rights and obligations under it. In addition
to, and not as a limitation of, the foregoing, the rights of indemnification
of Indemnitee provided under this Agreement shall include those rights set
forth in Sections 2 and 9 below. The right to indemnification conferred
herein shall be presumed to have been relied upon by Indemnitee in serving or
continuing to serve the Company as an Agent and shall be enforceable as a
contract right.
If Indemnitee is entitled under this Agreement to indemnification by the
Company for some or a portion of the Expenses or Liabilities incurred by
Indemnitee, but not for the total amount thereof, the Company shall indemnify
Indemnitee, pursuant to the procedures set forth in this Agreement, for that
portion of the Expenses or Liabilities to which Indemnitee is entitled.
2. Advancement of Expenses. The Company shall advance to Indemnitee from time
to time all reasonable Expenses incurred by or on behalf of Indemnitee in
connection with an Indemnifiable Proceeding, as soon as practicable but in any
event no later than ten (10) business days after the receipt by the Company of
a written request for such advancement identifying the incurred Expenses in
reasonable detail (except to the extent that there has been a Final Adverse
Determination that Indemnitee is not entitled to be indemnified for such
Expenses). By execution of this Agreement, Indemnitee makes such undertaking
as is required by law at the time of such advancement of Expenses with respect
to repayment to the Company including, if required, the undertaking to repay
such advanced amounts to the Company only if and to the extent that there is a
Final Adverse Determination. Indemnitee's obligation to reimburse the Company
for any advancement of Expenses shall be unsecured and no interest shall be
charged thereon. In the event that the Company shall breach its obligation to
advance Expenses, the Parties agree that Indemnitee's remedies available at
law would not be adequate and that Indemnitee would be entitled to specific
performance.
3. Cooperation by Indemnitee. With respect to any Proceeding as to which
Indemnitee seeks indemnification, Indemnitee shall provide the Company with
such information and cooperation as it may reasonably require and as shall be
within Indemnitee's power.
4. Establishment of Trust. In the event of a Change in Control, the Company
shall, upon written request by Indemnitee, create a trust for the benefit of
Indemnitee and from time to time upon written request of Indemnitee shall fund
such trust in an amount sufficient to satisfy any and all Expenses reasonably
anticipated at the time of each such request to be incurred in connection with
an Indemnifiable Proceeding, and any and all judgments, fines, penalties and
settlement amounts from time to time actually paid or claimed, reasonably
anticipated or proposed to be paid by Indemnitee in connection with an
Indemnifiable Proceeding. The terms of the trust shall provide that upon a
Change in Control (i) the trust shall not be revoked or the principal thereof
invaded, without the written consent of Indemnitee, (ii) the trustee shall
advance within ten (10) business days of a request by Indemnitee any and all
Expenses to Indemnitee (and Indemnitee hereby agrees to reimburse the trust
under the circumstances under which Indemnitee would be required to reimburse
the Company under this Agreement), (iii) the trust shall continue to be funded
by the Company in accordance with the funding obligation set forth above, (iv)
the trustee shall promptly pay to Indemnitee all amounts for which Indemnitee
shall be entitled to indemnification pursuant to this Agreement or otherwise
and (v) all unexpended funds in such trust shall revert to the Company upon a
Final Adverse Determination. The trustee shall be chosen by Indemnitee.
Nothing in this Section 4 shall relieve the Company of any of its obligations
under this Agreement. All income earned on the assets held in the trust shall
be reported as income by the Company for federal, state, local and foreign
tax purposes.
5. Presumptions and Effect of Certain Proceedings.
(a) Upon making a request for indemnification or advancement of Expenses,
Indemnitee shall be presumed to be entitled to such indemnification or
advancement of Expenses under this Agreement and the Company shall have the
burden of proof to overcome that presumption in reaching any contrary
determination. The termination of any Proceeding by judgment, order,
settlement, arbitration award or conviction, or upon a plea of nolo contendere
or its equivalent shall not affect this presumption or, except as determined
by a Final judgment or other Final adjudication adverse to Indemnitee,
establish a presumption with regard to any factual matter relevant to
determining Indemnitee's rights to indemnification or advancement of Expenses
hereunder.
(b) For the purposes of any determination under Section 6 of this Agreement,
Indemnitee shall be deemed to have acted in good faith and in a manner
Indemnitee believed to be in the best interests of the Company, or, with
respect to any criminal action or proceeding, to have had no reasonable cause
to believe his conduct was unlawful, if his action is based on the records or
books of account of the Company or another enterprise, or on information
supplied to him by the officers of the Company or another enterprise in the
course of their duties, or on the advice of legal counsel for the Company or
another enterprise or on information or records given or reports made to the
Company or another enterprise by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care by the Company
or another enterprise. The provisions of this subsection shall not be deemed
to be exclusive or to limit in any way the circumstances in which a person may
be deemed to have met the applicable standard of conduct set forth in this
Agreement.
6. Procedure for Determination of Entitlement to Indemnification and Payment
Thereof.
(a) The procedures in this Section 6 shall not govern requests for and
payments of advancements of Expenses, which requests shall be made by
Indemnitee and responded to by the Company pursuant to the provisions of
Section 2 of this Agreement.
(b) Whenever Indemnitee seeks indemnification pursuant to this Agreement
(other than advancement of Expenses), Indemnitee shall submit to the Company
a written request for indemnification ("Indemnification Request") that shall
include sufficient documentation or information reasonably available to
Indemnitee for the determination of entitlement to indemnification.
Notwithstanding any other provision of this Agreement, no request for
indemnification for Liabilities, other than amounts paid in settlement, may
be made before a determination thereof in a Proceeding. Indemnitee shall
submit the Indemnification Request within a reasonable time, not to exceed
two years after any Final judgment, order, settlement, dismissal, arbitration
award, conviction, acceptance of a plea of nolo contendere or its equivalent,
or other termination of the Proceeding with respect to which Indemnitee
requested indemnification, whichever is the later date. The Company's Chief
Executive Officer or other appropriate officer shall, promptly upon receipt
of Indemnitee's request, advise the Board of Directors in writing that
Indemnitee has made such request. The determination of Indemnitee's
entitlement to indemnification as specified in Section 6(b) hereof shall be
made not later than thirty days after the Company's receipt of an
Indemnification Request that comports with the requirements of this Section
6(b) ("Proper Indemnification Request").
(c) The determination of whether Indemnitee is entitled to indemnification
shall be made, at the Company's sole election, by one of the following
(provided that if there is a Change in Control of the Company, Independent
Legal Counsel shall make such determination):
(i) a majority vote of the shareholder(s) of the Company, with shares
"beneficially owned" (as defined in Rule 13d-3 under the Exchange Act) by the
Indemnitee not being entitled to vote; provided, however, that nothing set
forth in this Section shall require a "pass-through" vote of the beneficial
owners of shares;
(ii) a majority vote of a quorum consisting of Disinterested Directors; or
(iii) Independent Legal Counsel, whose determination shall be made in a
written opinion.
(d) Unless a Final Adverse Determination has occurred or a determination has
been made pursuant to this Section 6 that Indemnitee is not entitled to
indemnification, the Company shall pay Indemnitee the amount sought by any
Proper Indemnification Request within thirty days of receipt of such Request.
7. Specific Limitations on Indemnification and Advancement of Expenses. Both
the Company and Indemnitee acknowledge that in certain instances, federal law
or applicable public policy may prohibit the Company from indemnifying its
Agents or advancing Expenses to them under this Agreement or otherwise.
Indemnitee understands and acknowledges that the Company has undertaken or may
be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification or advancement of
Expenses to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify or advance Expenses to
Indemnitee. Notwithstanding anything in this Agreement to the contrary, the
Company shall not be obligated under this Agreement to make any payment to
Indemnitee with respect to any Proceeding:
(a) If prior to a Change of Control Indemnitee commenced such Proceeding
against the Company or officers or directors of the Company (other than a
Proceeding commenced by Indemnitee to enforce Indemnitee's rights under this
Agreement), unless Indemnitee's commencing such Proceeding was authorized by
the Board of Directors;
(b) To the extent that payment in connection with such Proceeding is actually
made to Indemnitee under any insurance policy, or is made to Indemnitee by the
Company or an affiliate otherwise than pursuant to this Agreement.
Notwithstanding the availability of insurance, Indemnitee also may claim
indemnification from the Company pursuant to this Agreement by assigning to
the Company any claims under such insurance to the extent Indemnitee is paid
by the Company;
(c) Provided there has been no Change in Control, for Liabilities in
connection with Proceedings settled without the Company's written consent,
which consent shall not be unreasonably withheld;
(d) For an accounting of profits made from the purchase or sale by Indemnitee
of securities of the Company within the meaning of section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or similar
provisions of any state statutory or common law;
(e) To the extent it would be otherwise prohibited by law, if so established by
a Final judgment adverse to Indemnitee or a Final Adverse Determination.
8. Fees and Expenses of Independent Legal Counsel. The Company agrees to pay
the reasonable fees and expenses of Independent Legal Counsel should such
Counsel be retained to make a determination of Indemnitee's entitlement to
indemnification or advancement of Expenses pursuant to Section 6(b) of this
Agreement and to fully indemnify such Counsel against any and all expenses and
losses incurred by it arising out of or relating to this Agreement or its
engagement pursuant hereto.
9. Remedies of Indemnitee.
(a) In the event that (i) a determination pursuant to this Agreement is made
that Indemnitee is not entitled to indemnification, (ii) advances of Expenses
are not timely made pursuant to this Agreement, (iii) payment has not been
timely made following a determination of entitlement to indemnification
pursuant to this Agreement or (iv) Indemnitee otherwise seeks enforcement of
this Agreement, Indemnitee shall be entitled to file suit in any court in the
State of California having subject matter jurisdiction thereof and in which
venue is proper seeking determination of Indemnitee's rights under this
Agreement.
(b) In the event that a determination that Indemnitee is not entitled to
indemnification, in whole or in part, has been made pursuant to Section 6
hereof, the decision in the judicial proceeding provided in Section 9(a)
shall be made de novo and Indemnitee shall not be prejudiced by reason of
the determination made pursuant to Section 6.
(c) If a determination that Indemnitee is entitled to indemnification or
advancement of Expenses has been made (or deemed to have been made) pursuant
to the terms of this Agreement, the Company shall be bound by such
determination in the absence of a misrepresentation of a material fact by
Indemnitee in connection with such determination.
(d) The Company shall be precluded from asserting that the procedures and
presumptions of this Agreement are not valid, binding and enforceable. The
Company shall stipulate in any such court or before any such arbitrator that
the Company is bound by all the provisions of this Agreement and is precluded
from making any assertion to the contrary.
10. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee
for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee,
shall contribute to the amount incurred by Indemnitee whether for Expenses
and/or Liabilities, in connection with any Indemnifiable Proceeding under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
the circumstances of such Indemnifiable Proceeding in order to reflect (i) the
relative benefits received by the Company and Indemnitee as a result of the
event(s) and/or transaction(s) giving cause to such Indemnifiable Proceeding;
and/or (ii) the relative fault of the Company(and its directors, officers,
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
11. Subrogation. In the event Indemnitee receives any payments 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.
12. Maintenance of Insurance.
(a) The Company represents that it presently has in place certain policies of
directors' and officers' liability insurance. Subject only to the provisions
of this Section 12, the Company agrees that so long as Indemnitee shall have
consented to serve or shall continue to serve as a director of the Company or
as an Agent of the Company, and thereafter so long as Indemnitee shall be
subject to any possible Proceeding by reason of the fact that Indemnitee was
serving as a director or Agent of the Company (such periods being hereinafter
sometimes referred to as the "Indemnification Period"), the Company will use
its best efforts to purchase and maintain in effect for the benefit of
Indemnitee one or more valid, binding and enforceable policies of directors'
liability insurance providing, in all respects, coverage both in scope and
amount which is no less favorable than that presently provided.
Notwithstanding the foregoing, the Company shall not be required to maintain
said policies of directors' liability insurance 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 warrant the cost
of maintaining such insurance.
(b) Anything in this Agreement to the contrary notwithstanding, to the extent
that and for so long as the Company chooses to continue to maintain any
policies of directors' liability insurance during the Indemnification Period,
the Company shall maintain similar and equivalent insurance for the benefit of
Indemnitee (unless such insurance is less favorable to Indemnitee than the
Company's other policies).
13. Notice to Insurers; Payments Irrespective of Insurance. If, at the time of
the receipt of a notice from Indemnitee pursuant to Section 16 hereof, the
Company has director or other pertinent 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. Notwithstanding the fact that the Company may have liability
insurance, the Company shall make payments of advances of Expenses to
Indemnitee in accordance with Sections 2, 4 and 6 of this Agreement even if
the Company has not yet received insurance proceeds with respect to such
payments.
14. Period of Limitations. No legal action shall be bought and no cause of
action shall be asserted by or in the right of the Company or any affiliate of
the Company against Indemnitee, Indemnitee's spouse, heirs, executors,
administrators or personal or legal representatives after the expiration of
two years from the date of accrual of such cause of action, and any claim or
cause of action of the Company or its affiliate shall be extinguished and
deemed released unless asserted by the timely filing of a legal action within
such two-year period; provided, however, that if any shorter period of
limitations is otherwise applicable to any such cause of action such shorter
period shall govern.
15. Modification, Waiver, Termination and Cancellation. No supplement,
modification, termination, cancellation or amendment of this Agreement shall
be binding unless executed in writing by both of the Parties. 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.
16. Notice by Indemnitee and Defense of Claim. Indemnitee shall promptly
notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
matter, whether civil, criminal, administrative or investigative. Indemnitee
shall also notify the Company promptly of any actual or potential Proceeding
that is, will or is reasonably likely to become an Indemnifiable Proceeding.
Indemnitee's failure to notify the Company will not relieve the Company from
any liability it may have to Indemnitee if such omission does not prejudice
the Company's rights. If such omission does prejudice the Company's rights,
the Company will be relieved from liability only to the extent of such
prejudice; and such omission will not relieve the Company from any liability
it may have to Indemnitee otherwise than under this Agreement. With respect
to any 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;
(b) The Company jointly with any other indemnifying party similarly notified
will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee; provided, however, that the Company shall not be
entitled to assume the defense of any Proceeding if there has been a Change in
Control or if Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee with respect to such
Proceeding. 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 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 own counsel in such 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 counsel engaged by the
Company may not adequately represent Indemnitee; or
(iii) the Company shall not in fact have employed counsel to assume the
defense in such Proceeding or shall not in fact have assumed such defense and
be acting in connection therewith with reasonable diligence;
in each of which cases the fees and expenses of such counsel shall be at the
expense of the Company;
(c) The Company shall not settle any Proceeding in a manner that would prevent
Indemnitee from engaging in Indemnitee's usual lawful business, without the
prior written consent of Indemnitee (which consent shall not be unreasonably
withheld); provided, how ever, that the Company may settle a Proceeding
without consent of Indemnitee in a manner that would prevent Indemnitee from
providing services to the Company, as a Director or otherwise.
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 and receipted for by the party to whom said notice or
other communication shall have been directed 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:
(a) If to Indemnitee, to:
Xxxx X. Xxxxxxx
c/o Norcal Waste Systems, Inc.
Five Xxxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(b) If to the Company, to:
Norcal Waste Systems, Inc.
Xxxx Xxxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the
Company or to the Company by Indemnitee, as the case may be.
18. Nonexclusivity. The rights of Indemnitee hereunder shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under
applicable law, the Company's articles of incorporation or bylaws, or any
agreements, vote of shareholders, resolution of the Board of Directors 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 to Indemnitee
thereunder or under this Agreement, Indemnitee shall be entitled to the full
benefits of such more favorable rights.
19. No Construction as Employment Agreement. Nothing in this Agreement shall
be construed as giving Indemnitee any right to be retained in the employ of
the Company or any of its subsidiaries or affiliates.
20. Restricted Payments. Notwithstanding any other provision of this
Agreement, the Company will not establish any trusts, acquire any letters of
credit, or make any payments under this Agreement if and to the extent such
actions would be prohibited by (i) the Indenture dated as of November 21,
1995 among the Company, its Affiliates and IBJ Xxxxxxxxx Bank & Trust Company,
as trustee, (ii) the Revolving Credit Agreement dated as of November 21, 1995
among the Company, its affiliates and First National Bank of Boston or (iii)
other credit agreements the Company may enter into in the future.
21. Certain Definitions.
(a) "Agent" shall mean any person who is or was a director, officer, employee,
fiduciary or other agent (including a consultant) of the Company or a
subsidiary or affiliate of the Company, or any other entity (including,
without limitation, a trust, corporation, joint venture, partnership, employee
stock ownership plan, other employee benefit plan or other enterprise) either
at the request of, for the convenience of, or otherwise to benefit the Company
or a subsidiary or affiliate of the Company.
(b) A "Change in Control" shall mean the occurrenceof any of the following:
(i) An acquisition (other than directly from the Company) of any voting
securities of the Company (the "Voting Securities") by any "Person" (which
includes a "group," as the terms person and group are used for purposes of
Section 13(d) or 14(d) of the Exchange Act), immediately after which such
Person has "beneficial ownership" (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of 25% or
more of the combined voting power of the Company's then outstanding Voting
Securities; provided, however, in determining whether a Change in Control has
occurred, Voting Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) will not constitute an acquisition which would cause
a Change in Control. A "Non-Control Acquisition" will mean an acquisition by
(i) an employee benefit plan (or a trust forming a part thereof) maintained by
(A) the Company or (B) any corporation or other Person of which a majority of
its voting power or its voting equity securities or equity interest is owned,
directly or indirectly, by the Company (for purposes of this definition, a
"Subsidiary") or (ii) the Company or its Subsidiaries, or (iii) any Person in
connection with a "Non-Control Transaction" (as hereinafter defined); (ii) The
individuals who, as of the date this Agreement, are members of the Board (the
"Incumbent Board"), cease for any reason to constitute at least two-thirds of
the members of the Board; provided, however, that if the election, or
nomination for election by the Company's common stockholders, of any new
director is approved by a vote of at least two-thirds of the Incumbent Board,
such new director will, for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided further, however, that no individual
will be considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board (a "Proxy Contest"), including by
reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or
(iii) The consummation of:
(A) a merger, consolidation or reorganization involving the Company, unless
such merger, consolidation or reorganization is a "Non-Control Transaction."
A "Non-Control Transaction" will mean a merger, consolidation or
reorganization of the Company where:
i) the shareholders of the Company, immediately before such merger,
consolidation or reorganization, own directly or indirectly immediately
following such merger, consolidation or reorganization, at least 75% of the
combined voting power of the outstanding voting securities of the corporation
resulting from such merger or consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, consolidation or
reorganization;
ii) the individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members of the board of
directors of the Surviving Corporation, or a corporation beneficially directly
or indirectly owning a majority of the Voting Securities of the Surviving
Corporation;
iii) no Person other than (i) the Company, (ii) any Subsidiary, (iii) any
employee benefit plan (or any trust forming apart thereof) maintained by the
Company, the Surviving Corporation, or any Subsidiary, or (iv) any Person who,
immediately prior to such merger, consolidation or reorganization had
Beneficial Ownership of 25% or more of the then outstanding Voting Securities,
has Beneficial Ownership of 25% or more of the combined voting power of the
Surviving Corporation's then outstanding voting securities.
(B) A complete liquidation or dissolution of the Company; or
(C) The sale or other disposition of all or substantially all of the assets
of the Company to any Person (other than a transfer to a Subsidiary in which
the Company retains at least 80% of the voting securities and the value of
ownership interests in such Subsidiary).
(iv) The Company enters into an agreement or arrangement, the consummation of
which would result in the occurrence of a Change in Control;
(v) Any person (including the Company or any of its subsidiaries, affiliates
or employee stock ownership plans) publicly announces an intention to take or
to consider taking actions that if consummated would constitute a Change in
Control;
(vi) The Company's Board of Directors adopts a resolution to the effect that,
for purposes of this Agreement, a Change in Control has occurred.
Notwithstanding the foregoing, a Change in Control will not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then-outstanding Voting Securities as
a result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities that increases the
percentage of the then-outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control will occur.
(c) "Disinterested Director" shall mean a director of the Company who is not
or was not a party to or otherwise involved in the Proceeding in respect of
which indemnification is being sought by Indemnitee.
(d) "Expenses" shall include all direct and indirect costs (including, without
limitation, attorneys fees, retainers, court costs, transcripts, fees of
experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, all other
disbursements or out-of-pocket expenses and reasonable compensation for time
spent by Indemnitee for which Indemnitee is otherwise not compensated by the
Company or any third party) actually and reasonably incurred in connection
with a Proceeding (including, but not limited to the investigation, defense,
settlement or appeal of a Proceeding) or establishing or enforcing a right to
indemnification or advancement of Expenses under this Agreement, applicable
law or otherwise; provided, however, that "Expenses" shall not include any
Liabilities.
(e) "Final" with respect to a judgment or other adjudication shall mean that
(i) all rights of appeal have been exhausted or (ii) no appeal was filed and
the time for filing or noticing an appeal has expired, whichever event occurs
first.
(f) "Final Adverse Determination" shall mean that a determination that
Indemnitee is not entitled to indemnification shall have been made pursuant to
Section 6 hereof and either (i) a Final adjudication pursuant to Section 9(a)
hereof shall have denied Indemnitee's right to indemnification hereunder, or
(ii) Indemnitee shall have failed to file suit pursuant to Section 9(a) for a
period of 120 days after the determination made pursuant to Section 6 hereof.
(g) "Indemnifiable Proceeding" shall mean any Proceeding that arises from or
is in any way associated with (i) a dispute between the Parties with respect
to this Agreement or (ii) any event or occurrence related to the fact that
Indemnitee is or was an Agent of the Company, or is or was serving at the
request of the Company as an Agent of another corporation, partnership, joint
venture, employee benefit plan, employee stock ownership plan, trust or other
enterprise, or by reason of anything done or not done by Indemnitee in any
such capacity.
(h) "Independent Legal Counsel" shall mean a law firm or a member of a firm
selected by the Company and approved by Indemnitee (which approval shall not
be unreasonably withheld) or, if there has been a Change in Control, selected
by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld), that neither is presently nor in the past five years
has been retained to represent: (i) the Company or any of its subsidiaries
or affiliates, or Indemnitee or any corporation of which Indemnitee was or
is a director, officer, employee or agent, or any subsidiary or affiliate of
such a corporation, in any material matter or (ii) any other party to the
Proceeding giving rise to a claim for indemnification or advancement of
Expenses hereunder. Notwithstanding the foregoing, the term "Independent
Legal Counsel" shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee's right to indemnification or advancement of Expenses
under this Agreement.
(i) "Liabilities" shall mean liabilities of any type whatsoever including,
but not limited to, any judgments, fines, ERISA excise taxes and penalties,
penalties 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) incurred in any
Proceeding, as well as any federal, state, local or foreign taxes imposed on
the Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement; provided, however, that "Liabilities" shall not include
any tax payments pursuant to the Internal Revenue Code Section 4999, any
successor to such section, or any similar tax imposed by any state or local
government.
(j) "Proceeding" shall mean any threatened, pending or completed action,
claim, suit, arbitration, alternate dispute resolution mechanism, inquiry
investigation, administrative hearing or any other proceeding, whether civil,
criminal, administrative or investigative.
22. Binding Effect; Duration and Scope of Agreement. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the Parties and
their respective successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business 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 Agent. In addition, this Agreement will apply to acts
or omissions of Indemnitee which occurred prior to the date of this Agreement
if Indemnitee was a director or other Agent of the Company or was serving at
the request of the Company as an officer, director, employee or Agent of
another corporation, partnership, joint venture, trust or other enterprise,
at the time such act or omission occurred.
23. Severability. If any provision or provisions of this Agreement (or any
portion thereof) 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 shall not in any way be affected or impaired thereby;
(b) To the fullest extent legally possible, the provisions of this Agreement
shall be construed so as to give effect to the intent of any provision held
invalid, illegal or unenforceable;
(c) The Company's obligations under such provision or provisions shall be null
and void and Indemnitee shall have no breach of contract or other remedy with
respect to the Company's failure to satisfy such provision or provisions.
24. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, as applied
to contracts between California residents entered into and to be performed
entirely within the State of California, without regard to conflict of laws
rules.
25. Entire Agreement. 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,
except as specifically referred to herein or as provided in Section 17 hereof.
26. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original.
Executed as of the 24th day of July, 1997.
NORCAL WASTE SYSTEMS, INC.
/s/Xxxxxxx X. Xxxxxxxxxx
By: Xxxxxxx X. Xxxxxxxxxx
Its: President
INDEMNITEE
/s/Xxxx Xxxxxxx
Xxxx Xxxxxxx
