EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), is between Diversified
Corporate Resources, Inc., a Texas corporation (the "Company") and Xxxx X. Xxxxx
(the "Indemnitee").
W I T N E S S E T H:
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WHEREAS, the Indemnitee is an officer and/or director of the Company; and
WHEREAS, the Company is a party to certain litigation proceedings (the
"Lawsuit") which (a) involves Xxxxxx X. Xxxxx, Xx. and Ditto Properties Company
(collectively referred to herein as "Ditto"), the Company and others, and (b) is
pending before the 290th Judicial District Court of Dallas County, Texas (Cause
No. 97-02079-M); and
WHEREAS, the Board of Directors of the Company have determined that it is
in the best interests of the Company to indemnify the officers and directors of
the Company in connection with the Lawsuit and related matters; and
WHEREAS, the purpose of this Agreement is to document the Company's
commitment to indemnify the Indemnitee to the fullest extent permitted by law;
and
WHEREAS, the Company is willing to indemnify Indemnitee in order to retain
the services of Indemnitee.
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Indemnitee hereby agree as follows:
1. Certain Definitions.
(a) Claim: any threatened, pending, or completed action, suit, or
proceeding or any inquiry or investigation (including discovery), whether
conducted by the Company or any other party, directly or indirectly related to
the Lawsuit, the fact and matters involved in the Lawsuit, and the actions and
inaction's of the Company and/or the Board of Directors of the Company in
connection with or related to the manner in which the Company (i) has pursued
its claims for damages against Ditto, and Ditto's claims, if any, for damages
against the Company, and (ii) has funded the payment of legal fees, expenses,
interest and bank debt payments by J. Xxxxxxx Xxxxx ("Xxxxx") and DCRI LP NO 2,
Inc., a Texas corporation, directly or indirectly related to the Lawsuit and
other disputes involving Xxxxx and Ditto.
(b) Expenses: all costs, expenses (including attorneys' and expert
witnesses' fees), judgments, fines, penalties, amounts paid in settlement and
obligations (including all interest, assessments, and other charges paid or
payable in connection with or in respect of such expenses, judgments, fines,
penalties, or amounts paid in settlement) paid or incurred in connection with
investigating, defending (including affirmative defenses and counterclaims),
settling, being a witness in, or participating in (including on appeal), or
preparing to defend, be a witness in, or participate in, any Claim relating to
any lndenmifiable Event.
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(c) Indemnifiable Event: any event or occurrence related to, or arising
out of, the fact that Indemnitee is or was a director, officer, employee,
trustee, or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee, trustee, or agent of mother
corporation, partnership, joint venture, employee benefit plan, trust, or other
enterprise, or by reason of any thing done or not done by Indemnitee in any such
capacity.
2. Basic Indemnification and Expense Reimbursement Arrangement.
(a) In the event Indemnitee was, is, or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable but in any event no later than
thirty (30) days after written demand is presented to the Company, against any
and all Expenses of or with respect to that Claim.
(b) If so requested by Indemnitee, the Company shall pay any and all
Expenses incurred by Indemnitee (or, if applicable, reimburse Indemnitee for any
and all Expenses incurred by Indemnitee and previously paid by Indeminitee)
within ten days after such request (an "Expense Advance"). However, such request
must contain (i) a statement reasonably detailing the Expenses for which
advancement is requested, and (ii) an undertaking by Indemnitee, or on
Indemnitee's behalf, to repay such advancement of Expenses if it is ultimately
determined by a final judicial decision from which there is no further right to
appeal that Indemnitee is not entitled to be indemnified for such expenses under
this Agreement or otherwise. The Company shall be obligated to make or pay an
Expense Advance in advance of the final disposition or conclusion of any Claim
in accordance with this Section 2(b). Any dispute as to the reasonableness of
any Expense shall not delay an Expense Advance by the Company, and the Company
agrees that any such dispute shall be resolved only upon the disposition or
conclusion of the underlying Claim against the Indemnitee.
3. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all costs and expenses (including attorneys' and
expert witnesses' fees), and, if requested by Indemnitee, shall (within ten (10)
business days of that request) advance or reimburse those costs and expenses to
Indemnitee, that are incurred by Indemnitee in connection with (a) the
negotiation and execution of this Agreement, which shall include, without
limitation, the review of the Company's Articles of Incorporation, Bylaws and
the directors' and officers' liability insurance policies and (b) any claim,
asserted against or action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or provision of the Company's Articles of Incorporation or Bylaws now
or hereafter in effect relating to Claims for Indemnifiable Events, or (ii)
recovery under any directors' and officers' liability insurance policies
maintained by the Company; provided, however, that Indemnitee shall repay such
advancement of costs and expenses if it is ultimately determined by a final
judicial decision from which there is no further right to appeal that Indemnitee
is not entitled to be indemnified for such costs or expenses under this
Agreement or otherwise.
4. Partial Indemnity. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that 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
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any issue or matter herein, including dismissal without prejudice, Indemnitee
shall be indemnified against all Expenses incurred in connection therewith.
5. Contribution.
(a) Contribution Payment. To the extent the indemnification provided for
under any provision of this Agreement is determined (in the manner hereinabove
provided) not to be permitted under applicable law, then in the event Indemnitee
was, is, or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant in, a Claim by
reason of (or arising in part out of) an Indemnifiable Event, to the extent
contribution with respect to such Indemnifiable Event is permitted under
applicable law, the Company, in lieu of indemnifying Indemnitee, shall
contribute to the amount of any and all Expenses assessed against or incurred or
paid by Indemnitee on account of or with respect to that Claim for which such
contribution is permitted ("Contribution Amounts"), in such proportion as is
appropriate to reflect the relative fault with respect to the Indemnifiable
Event giving rise to the Contribution Amounts of Indemnitee, on the one hand,
and of the Company and any and all other parties (including officers and
directors of the Company other than Indemnitee) who may be at fault with respect
to such Idemnifiable Event (collectively, such parties, including the Company,
are herein referred to as the "Third Parties") on the other hand.
(b) Relative Fault. The relative fault of the Third Parties and the
Indemnitee shall be determined (i) by reference to the relative fault of
lndemnitee as determined by the court or other governmental agency assessing the
Contribution Amounts or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by a majority of the disinterested
members of the Company's Board of Directors after giving effect to, among other
things, the relative intent, knowledge, access to information, and opportunity
to prevent or correct the applicable Indemnifiable Event and other relevant
equitable considerations of each party. The Company and Indemnitee agree that it
would not be just and equitable if contribution pursuant to this Section 5(b)
were determined by pro rata allocation or by any other method of allocation
which does take account of the equitable considerations referred to in this
Section 5(b).
6. Presumption. Indemnitee shall be presumed to be entitled to indemnification
for any act or omission covered in this Agreement. The burden of proof of
establishing that Indemnitee is not entitled to indemnification because of the
failure to fulfill any legal requirement shall be on the Company.
7. Non-exclusivity. The rights of lndemnitee hereunder shall be in addition to
any other rights Indemnitee may have under the Company's Bylaws or Articles of
Incorporation or the Texas Business Corporation Act ("TBCA") or otherwise. To
the extent that a change in the TBCA (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Company's Bylaws or Articles of Incorporation and this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by that change.
8. Liability Insurance. Except as otherwise agreed to by the Company and
Indemnitee in a written agreement, to the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by that policy or those policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.
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9. Miscellaneous.
(a) Notice Provision. Any notice, payment, demand or communication
required or permitted to be delivered or given by the provisions of this
Agreement shall be deemed to have been effectively delivered and received (i) if
personally delivered, upon receipt, (ii) if sent via facsimile, upon mechanical
confirmation of successful transmission thereof generated by the sending
telecopy machine only if such notice is also delivered by hand, or deposited in
the United States mail, postage prepaid, registered or certified mail, on or
before three (3) business days after its delivery by facsimile, or (iii) if sent
by registered or certified mail five (5) days after deposit thereof in the U.S.
mail and addressed to the parties at the addresses set forth above their
signatures to this Agreement.
(b) Entire Agreemcnt. This Agreement constitutes the entire understanding
of the parties and supersedes all prior understandings, whether written or oral,
between the parties with respect to the subject matter of this Agreement.
(c) Severability of Provisions. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid, and enforceable.
(d) Applicable Law. This Agreement shall be governed by and construed under
the laws of the State of Texas.
(e) Execution in Counterparts. Th. is Agreement and any amendment may be
executed simultaneously or in two or more counterparts, each of which together
shall constitute one and the same instrument.
(f) Cooperation and Intent. The Company shall cooperate in good faith with
Indemnitee and use its best efforts to ensure that Indemnitee is indemnified for
liabilities described herein to the fullest extent permitted by law.
(g) Amendment. No amendment, modification or alteration of the terms of
this Agreement shall be binding unless in writing, dated subsequent to the date
of this Agreement, and executed by the parties hereto.
(h) Binding Effect. The obligations of the Company to Indemnitee hereunder
shall survive and continue as to Indemnitee even if Indemnitee ceases to be a
director, officer employee and/or agent of the Company. Each and all of the
covenants, terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the successors to the Company and to the benefit of the
estate, heirs, executors, administrators and personal representatives of
Indemnitee.
(I) Effective Date. The provisions of this Agreement shall cover claims,
actions, suits and proceedings whether now pending or hereafter commenced and
shall be retroactive to
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cover acts or omissions or alleged acts or omissions which heretofore have taken
place. By way of example but not of limitation, this Agreement shall apply to
all liabilities, known or unknown, contingent or otherwise, that presently exist
or arise in the future, regardless whether the liabilities relate to activities
of Indemnitee and/or the Company preceding or subsequent to the date of this
Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this Indemnification
Agreement on the ____ day of _________, 2002 but effective as of the 9th day of
July, 2002.
THE COMPANY
DIVERSIFIED CORPORATE RESOURCES, INC.
By:
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Name
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Title
Address: 00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
THE INDEMNITEE:
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Xxxx X. Xxxxx
Address: 0000 Xxxxxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
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