EXHIBIT 10.3
INDEMNITY AGREEMENT
This INDEMNITY AGREEMENT is made as of _______________, 2004, between
Xxxxxxx Enterprises, Inc. (the "Corporation"), and _____________________
("Indemnitee").
In consideration of the Indemnitee's continued service after the date
hereof, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Indemnitee shall serve or continue to serve as
[AN OFFICER] [A DIRECTOR] of the Corporation, and any other entity of which he
is serving at the request of the Corporation, and agrees to serve in such
capacities for so long as he is duly elected or appointed and qualified or until
such earlier time as he tenders his resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term "Claim" shall mean any threatened, pending or completed
claim, action, suit or proceeding, including appeals, whether civil, criminal,
administrative or investigative and whether made judicially or extra-judicially,
including any action by or in the right of the Corporation, or any separate
issue or matter therein, as the context requires.
(b) The term "Determining Body" shall mean (i) those members of the
Board of Directors who are not named or threatened to be named as parties to the
Claim for which indemnification is being sought ("Impartial Directors"), if
there are at least two Impartial Directors, or (ii) a committee of at least two
Impartial Directors appointed by the Board or a duly authorized committee
thereof (regardless whether the directors voting on such appointment are
Impartial Directors) or (iii) if there are fewer than two Impartial Directors or
if the Board of Directors or the committee appointed pursuant to clause (ii) of
this paragraph so directs (regardless whether the directors voting on such
appointment are Impartial Directors), independent legal counsel, which may be
the regular outside counsel of the Corporation, as designated by the Impartial
Directors or, if no such directors exist, the full Board of Directors.
(c) The term "Disbursing Officer" shall mean the President of the
Corporation or, if the President is a party or threatened to be named a party to
the Claim for which indemnification is being sought, any officer who is not a
party or threatened to be named a party to the Claim and who is designated by
the President to be the Disbursing Officer with respect to indemnification
requests related to the Claim, which designation shall be made promptly and not
more than 10 days after receipt of the initial request for indemnification with
respect to such Claim.
(d) The term "Expenses" shall mean any expenses or costs including,
without limitation, attorney's fees, judgments, punitive or exemplary damages,
fines, excise taxes or amounts paid in settlement.
(e) The term "Insurance Policy" shall mean, collectively, (i) the
Directors and Officers Liability Policy that the Corporation has obtained from
Continental Casualty Company (C.N.A.) (Policy #132032175), (ii) the Excess
Directors and Officers Liability Policies that the Corporation
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has obtained from Landmark American Insurance Company (Policy #LHS616828),
Illinois Union Insurance Company (Policy #DOX G216-48553-003), Executive Risk
Specialty Insurance Company (Policy #8151-6730) and American International
Specialty Lines Company (Policy #459-73-71), and (iii) the Side (Clause) A
Difference-in-Conditions policy that the Corporation has obtained from XL
Specialty Insurance Company (Policy #XXX000000-04) for the policy period
commencing September 27, 2004 and ending September 27, 2005.
3. Limitation of Liability. To the fullest extent permitted by Article
VI of the Articles of Incorporation of the Corporation (as in effect on the date
hereof), Indemnitee shall not be liable for any breach of his fiduciary duty. If
and to the extent such provisions are amended to permit further limitations of
liability, Indemnitee shall not be liable for any breach of his fiduciary duty
to the fullest extent permitted after any such amendment.
4. Maintenance of Insurance.
(a) The Corporation represents and warrants that it currently maintains
in force and effect the Insurance Policy, and Indemnitee represents and warrants
that he has been furnished with a copy of the Insurance Policy. Subject only to
the provisions of Section 4(b) hereof the Corporation hereby agrees that, so
long as Indemnitee shall continue to serve in any capacity referred to in
Section 5(a) hereof, and thereafter so long as Indemnitee shall be subject to
any possible Claim, the Corporation shall use its commercially reasonable best
efforts to purchase and maintain in effect for the benefit of Indemnitee one or
more valid and enforceable policies of directors and officers liability
insurance providing, in all respects, coverage at least comparable to that
currently provided pursuant to the Insurance Policy.
(b) The Corporation shall not be required to purchase and maintain the
Insurance Policy or any comparable policy if directors and officers liability
insurance is not reasonably available or if, in the reasonable business judgment
of the then directors of the Corporation, there is insufficient benefit to the
Corporation from such insurance.
5. Additional Indemnity.
(a) To the extent any Expenses incurred by or on behalf of Indemnitee
are in excess of the amounts reimbursed or indemnified pursuant to the
provisions of Section 4 hereof, the Corporation shall indemnify and hold
harmless Indemnitee against any Expenses actually and reasonably incurred by
Indemnitee (as they are incurred) in connection with any Claim against
Indemnitee, or involving Indemnitee solely as a witness or person required to
give evidence, by reason of Indemnitee's position as a (i) director or officer
of the Corporation, (ii) director or officer of any subsidiary of the
Corporation, (iii) fiduciary with respect to any employee benefit plan of the
Corporation, or (iv) director, officer, partner, employee or agent of another
entity, if such position is or was held at the request of the Corporation,
whether relating to service in such position before or after the effective date
of this Agreement, if (A) Indemnitee is successful in his defense of the Claim
on the merits or otherwise or (B) Indemnitee has been found by the Determining
Body to have met the Standard of Conduct (as hereinafter defined); provided that
(1) the amount of Expenses for which the Corporation shall indemnify Indemnitee
may be reduced by the Determining Body to such amount as it deems proper if it
determines that the Claim involved the
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receipt of an improper personal benefit by Indemnitee, and (2) no
indemnification shall be made in respect of any Claim as to which Indemnitee
shall have been adjudged by a court of competent jurisdiction, after exhaustion
of all appeals therefrom, to be liable for willful or intentional misconduct in
the performance of his duty to the Corporation, unless, and only to the extent
that, a court shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnity for such Expenses which the court shall
deem proper.
(b) For purposes of this Agreement, the "Standard of Conduct" is met
when conduct by Indemnitee with respect to which a Claim is asserted was conduct
performed in good faith which he reasonably believed to be in, or not opposed
to, the best interest of the Corporation, and, in the case of a Claim which is a
criminal action or proceeding, conduct that Indemnitee had no reasonable cause
to believe was unlawful. The termination of any Claim by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that Indemnitee did not meet the
Standard of Conduct.
(c) Promptly upon becoming aware of the existence of any Claim as to
which Indemnitee may be indemnified for Expenses and as to which Indemnitee
desires to obtain indemnification, Indemnitee shall notify the President of the
Corporation, but the failure to promptly notify the President shall not relieve
the Corporation from any obligation hereunder, except and to the extent that
such failure has materially and irrevocably harmed the Corporation's ability to
defend against such Claim pursuant to Section 5(f)(i) hereof. Within 5 business
days of receipt of such notice, the President shall advise the members of the
Board of Directors of the request and that the establishment of a Determining
Body with respect thereto will be a matter to be considered at the next
regularly scheduled meeting of the Board. If a meeting of the Board of Directors
is not regularly scheduled within 30 calendar days of the date the President
receives notice of the Claim, the President shall cause a special meeting of the
Board of Directors to be called within 45 days of receipt of such notice in
accordance with the provisions of the Corporation's By-laws. After the
Determining Body has been established, the President shall inform Indemnitee of
the constitution of the Determining Body and Indemnitee shall provide the
Determining Body with all facts relevant to the Claim known to him, and deliver
to the Determining Body all documents relevant to the Claim in his possession.
Before the 60th day (the "Determination Date") after its receipt from Indemnitee
of such information, together with such additional information as the
Determining Body may reasonably request of Indemnitee prior to such date (the
receipt of which shall not begin a new 60-day period), the Determining Body
shall determine whether or not Indemnitee has met the Standard of Conduct and
shall advise Indemnitee of its determination. If Indemnitee shall have supplied
the Determining Body with all relevant information, including all additional
information reasonably requested by the Determining Body, any failure of the
Determining Body to make a determination by or on the Determination Date as to
whether the Standard of Conduct was met shall be deemed to be a determination
that the Standard of Conduct was met by Indemnitee.
(d) If at any time before or after the Determination Date, Indemnitee
becomes aware of any relevant facts or documents not theretofore provided by him
to the Determining Body, Indemnitee shall promptly inform the Determining Body
of such facts or documents, unless the
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Determining Body has obtained such facts or documents from another source, The
provision of such facts to the Determining Body shall not begin a new 60-day
period.
(e) The Determining Body shall have no power to revoke a determination
that Indemnitee met the Standard of Conduct unless Indemnitee (i) submits
fraudulent information to the Determining Body at any time during the 60 days
before the Determination Date or (ii) fails to comply with the provisions of
Sections 5(c) or 5(d) hereof, including without limitation Indemnitee's
obligation to submit information or documents relevant to the Claim reasonably
requested by the Determining Body before the Determination Date.
(f) In the case of any Claim not involving any proposed, threatened or
pending criminal proceeding:
(i) If Indemnitee has, in the judgment of the Determining Body,
met the Standard of Conduct, the Corporation may, except as otherwise
provided below, individually or jointly with any other indemnifying party
similarly notified, assume the defense thereof with counsel reasonably
satisfactory to Indemnitee. If the Corporation assumes the defense of the
Claim, it shall keep Indemnitee informed as to the progress of such
defense so that Indemnitee may make an informed decision as to the need
for separate counsel. After notice from the Corporation that it is
assuming the defense of the Claim, it will not be liable to Indemnitee
under this Agreement for any legal expenses subsequently incurred by
Indemnitee in connection with the defense other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the
right to employ his own counsel in connection with such Claim but the fees
and expenses of such counsel incurred after such notice from the
Corporation of its assumption of the defense shall be at the expense of
Indemnitee unless (A) the employment of counsel by Indemnitee has been
authorized by the Determining Body, (B) Indemnitee shall have concluded
reasonably that there may be a conflict of interest between the
Corporation and Indemnitee or between Indemnitee and other indemnitees as
to whom the Corporation has assumed the defense, in the conduct of the
defense of such action or (C) the Corporation shall not in fact have
employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
Corporation. The Corporation shall not be entitled to assume the defense
of any Claim to which Indemnitee shall have made the conclusion provided
for in (B) above; and
(ii) The Corporation shall fairly consider any proposals by
Indemnitee for settlement of the Claim. If the Corporation proposes a
settlement of the Claim and such settlement is acceptable to the person
asserting the Claim, or the Corporation believes a settlement proposed by
the person asserting the Claim should be accepted, it shall inform
Indemnitee of the terms of such proposed settlement and shall fix a
reasonable date by which Indemnitee shall respond. If Indemnitee agrees to
such terms, he shall execute such documents as shall be necessary to make
final the settlement. If Indemnitee does not agree with such terms,
Indemnitee may proceed with the defense of the Claim in any manner he
chooses, provided that if
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Indemnitee is not successful on the merits or otherwise, the Corporation's
obligation to indemnify such Indemnitee as to any Expenses incurred
following his disagreement with the Corporation shall be limited to the
lesser of (A) the total Expenses incurred by Indemnitee following his
decision not to agree to such proposed settlement or (B) the amount that
the Corporation would have paid pursuant to the terms of the proposed
settlement. If, however, the proposed settlement would impose upon
Indemnitee any requirement to act or refrain from acting that would
materially interfere with the conduct of Indemnitee's affairs, Indemnitee
may refuse such settlement and continue his defense of the Claim, if he so
desires, at the Corporation's expense in accordance with the terms and
conditions of this Agreement without regard to the limitations imposed by
the immediately preceding sentence. In any event, the Corporation shall
not be obligated to indemnify Indemnitee for any amount paid in a
settlement that the Corporation has not approved.
(g) In the case of any Claim involving a proposed, threatened or pending
criminal proceeding, Indemnitee shall be entitled to conduct the defense of the
Claim with counsel of his choice and to make all decisions with respect thereto,
provided, however, that the Corporation shall not be obliged to indemnify
Indemnitee for any amount paid in settlement of such a Claim unless the
Corporation has approved such settlement.
(h) After notifying the Corporation of the existence of a Claim,
Indemnitee may from time to time request the Corporation to pay the Expenses
(other than judgments, fines, penalties or amounts paid in settlement) that he
incurs in pursuing a defense of the Claim before the time that the Determining
Body determines whether the Standard of Conduct has been met. The Disbursing
Officer shall pay to Indemnitee the amount requested (regardless of Indemnitee's
apparent ability to repay such amount) upon receipt of an undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Corporation under the
circumstances.
(i) After the Determining Body has determined that the Standard of
Conduct has been met, for so long as and to the extent that the Corporation is
required to indemnify Indemnitee under this Agreement, the provisions of Section
5(h) hereof shall continue to apply with respect to Expenses incurred after such
time except that (i) no undertaking shall be required of Indemnitee and (ii) the
Disbursing Officer shall pay to Indemnitee the amount of any fines, penalties or
judgments against him which have become final and for which he is entitled to
indemnification hereunder, and any amount of indemnification ordered to be paid
to him by a court.
(j) Any determination by the Corporation with respect to settlement of a
Claim shall be made by the Determining Body.
(k) All determinations and judgments made by the Determining Body
hereunder shall be made in good faith.
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6. Enforcement.
(a) The rights provided by this Agreement shall be enforceable by
Indemnitee in any court of competent jurisdiction.
(b) If Indemnitee seeks a judicial adjudication of his rights under this
Agreement, or to require action to be taken under this Agreement, or to recover
damages for breach of this Agreement, Indemnitee shall be entitled to recover
from the Corporation, and shall be indemnified by the Corporation against, any
and all expenses actually and reasonably incurred by him in connection with such
proceeding unless it shall be determined by the court that Indemnitee's Claim is
frivolous.
(c) In any judicial proceeding described in this Section 6, the
Corporation shall bear the burden of proving that Indemnitee is not entitled to
the relief sought.
7. Saving Clause. If any provision of this Agreement is determined by a
court having jurisdiction over the matter to violate or conflict with applicable
law, the court shall be empowered to modify or reform such provision so that, as
modified or reformed, such provision provides the maximum indemnification
permitted by law and such provision, as so modified or reformed, and the balance
of this Agreement, shall be applied in accordance with their terms. Without
limiting the generality of the foregoing, if any portion of this Agreement shall
be invalidated on any ground, the Corporation shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated and to the full extent permitted
by law with respect to that portion that has been invalidated.
8. Non-Exclusivity.
(a) The indemnification and advancement of Expenses provided by or
granted pursuant to this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee is or may become entitled under any statute, articles
of incorporation, by-law, authorization of stockholders or directors, agreement,
or otherwise.
(b) It is the intent of the Corporation by this Agreement to indemnify
and hold harmless Indemnitee to the fullest extent permitted by law, so that if
applicable law would permit the Corporation to provide broader indemnification
rights than are currently permitted, the Corporation shall indemnify and hold
harmless Indemnitee to the fullest extent permitted by applicable law
notwithstanding that the other terms of this Agreement would provide for lesser
indemnification.
9. Confidentiality. The Corporation and Indemnitee shall keep
confidential to the extent permitted by law and their fiduciary obligations all
information and determinations provided pursuant to or arising out of the
operation of this Agreement and the Corporation and Indemnitee shall instruct
its or his agents and employees to do likewise.
10. Prior Indemnity Agreements. Effective as of the date and year first
above written, this Indemnity Agreement supersedes any prior indemnity
agreements between the Indemnitee and the Corporation.
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11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original but all of which taken
together shall be deemed to constitute a single instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Louisiana.
13. Successors and Assigns. This Agreement shall be binding upon
Indemnitee and upon the Corporation, its successors and assigns, and shall inure
to the benefit of Indemnitee's heirs, personal representatives, and assigns and
to the benefit of the Corporation, its successors and assigns.
14. Amendment. No amendment, modification, termination or cancellation
of this Agreement shall be effective unless made in writing signed by the
Corporation and Indemnitee. Notwithstanding any amendment, modification,
termination or cancellation of this Agreement or any portion hereof, Indemnitee
shall be entitled to indemnification in accordance with the provisions hereof
with respect to any acts or omissions of Indemnitee which occur prior to such
amendment, modification, termination or cancellation.
15. Gender. All pronouns and variations thereof used in this Agreement
shall be deemed to refer to the masculine, feminine or neuter gender, singular
or plural, as the identity of the person, persons, entity or entities referred
to may require.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the date and year first above written.
XXXXXXX ENTERPRISES, INC.
By: /s/XXXXXXX X. XXXXX
----------------------------------------
Xxxxxxx X. Xxxxx
President and Chief Executive Officer
INDEMNITEE:
____________________________________________
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