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EXHIBIT 10.9
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is executed as of
November 6, by and between Xxxxxxx TXEN Corporation, a Delaware Corporation
("TXEN") and _______, a director, officer or representative (as hereinafter
defined) of TXEN (the "Indemnitee").
RECITALS:
TXEN and the Indemnitee are each aware of the exposure to litigation
of officers, directors and representatives of TXEN as such persons exercise
their duties to TXEN. TXEN and the Indemnitee are also aware of conditions in
the insurance industry that have affected and may continue to affect TXEN's
ability to obtain appropriate directors' and officers' liability insurance on
an economically acceptable basis. TXEN desires to continue to benefit from the
services of highly qualified, experienced and otherwise competent persons such
as the Indemnitee; the Indemnitee desires to serve or to continue to serve TXEN
as a director or an officer, or as a director, officer or trustee of another
corporation, joint venture, trust or other enterprise in which TXEN has a
direct or indirect ownership interest, for so long as TXEN continues to provide
on an acceptable basis adequate and reliable indemnification against certain
liabilities and expenses that may be incurred by the Indemnitee.
AGREEMENT:
In consideration of the foregoing premises and the mutual covenants
herein contained, the parties hereto agree as follows:
1. INDEMNIFICATION. Subject to the terms of this Agreement, TXEN shall
indemnify the Indemnitee with respect to his activities as a director or
officer of TXEN and/or as a person who is serving or has served on behalf of
TXEN ("representative") as a director, officer, or trustee of another
corporation, joint venture, trust or other enterprise, domestic or foreign, in
which TXEN has a direct or indirect ownership interest (an "affiliated entity")
against expenses (including, without limitation, attorneys' fees, judgments,
fines, and amounts paid in settlement) actually and reasonably incurred by him
or her ("Expenses") in connection with any claim against Indemnitee which is
the subject of any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, investigative or otherwise
and whether formal or informal (a "Proceeding"), to which Indemnitee was, is,
or is threatened to be made a party by reason of facts which include
Indemnitee's being or having been such a director, officer or representative,
to the extent of the highest and most advantageous to the Indemnitee, as
determined by the Indemnitee, of one or any combination of the following:
(a) The benefits provided by the Certificate of Incorporation, or
Bylaws or their equivalent of TXEN in effect at the time
Expenses are incurred by Indemnitee;
(b) The benefits allowable under Delaware law in effect at the
date hereof;
(c) The benefits allowable under the law of the jurisdiction
under which TXEN exists at the time Expenses are incurred by
the Indemnitee;
(d) The benefits available under liability insurance obtained by
TXEN;
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(e) Such other benefits as are or may be otherwise available to
Indemnitee.
Combination of two or more of the benefits provided by (a) through (e) shall be
available to the extent that the Applicable Document, as hereafter defined,
does not require that the benefits provided therein be exclusive of other
benefits. The document or law providing for the benefits listed in items (a)
through (e) is defined as the "Applicable Document". TXEN hereby undertakes to
use its best efforts to assist Indemnitee, in all proper and legal ways, to
obtain the benefits selected by Indemnitee under items (a) through (g) above.
For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans for employees of TXEN or of any affiliated
entity without regard to ownership of such plans; references to "fines" shall
include any excise taxes assessed on the Indemnitee with respect to any
employee benefit plan. References to "serving on behalf of TXEN" shall include
any service as a director, officer, employee or agent of TXEN which imposes
duties on, or involves services by, the Indemnitee with respect to an employee
benefit plan, its participants or beneficiaries. References to the masculine
shall include the feminine; references to the singular shall include the plural
and vice versa. If the Indemnitee acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan, he shall be deemed to have acted in a manner
consistent with the standards required for indemnification by TXEN under the
Applicable Documents.
2. INSURANCE. TXEN shall maintain directors' and officers' liability
insurance for so long as Indemnitee's services are covered hereunder, provided
and only to the extent that such insurance is available in amounts and on terms
and conditions determined by TXEN to be acceptable. However, TXEN agrees that
the provisions of this agreement shall remain in effect regardless of whether
liability or other insurance coverage is at any time obtained or retained by
TXEN, except that any payments in fact made to Indemnitee under an insurance
policy obtained or retained by TXEN shall reduce the obligation of TXEN to make
payments hereunder by the amount of the payments made under any such insurance
policy.
3. PAYMENT OF EXPENSES. At Indemnitee's request, TXEN shall pay the
Expenses as and when incurred by Indemnitee, but only after receipt of written
notice pursuant to Section 5 of this agreement and an undertaking by or on
behalf of Indemnitee to repay such amounts so paid on Indemnitee's behalf if it
shall ultimately be determined under the Applicable Document that Indemnitee is
not entitled to be indemnified by TXEN for such Expenses. The portion of
Expenses that represents attorneys' fees and other costs incurred in defending
any Proceeding shall be paid by TXEN within thirty (30) days of TXEN's receipt
of such request, together with reasonable documentation (consistent, in the
case of attorneys' fees, with TXEN's practice in payment of legal fees for
outside counsel generally) evidencing the amount and nature of such Expenses,
subject to its having received such a notice and undertaking.
4. ADDITIONAL RIGHTS. The indemnification provided in this Agreement shall
not be exclusive of any other indemnification or right to which Indemnitee may
be entitled and shall continue after Indemnitee has ceased to occupy a position
as an officer, director or representative as described in Section 1 above with
respect to Proceedings relating to or arising out of Indemnitee's acts or
omissions during his service in such position.
5. NOTICE TO TXEN. Indemnitee shall provide to TXEN prompt written notice
of any Proceeding brought, threatened, asserted or commenced against Indemnitee
with respect to which
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Indemnitee may assert a right to indemnification hereunder, provided that
failure to provide such notice shall not in any way limit Indemnitee's rights
under this Agreement.
6. COOPERATION IN DEFENSE AND SETTLEMENT. Indemnitee shall not make any
admission or effect any settlement of any Proceeding without TXEN's written
consent unless Indemnitee shall have determined to undertake his own defense in
such matter and has waived the benefits of this Agreement. TXEN shall not
settle any Proceeding to which Indemnitee is a party in any manner which would
impose any Expense on Indemnitee without his written consent. Neither
Indemnitee nor TXEN will unreasonably withhold consent to any proposed
settlement. Indemnitee and TXEN shall cooperate to the extent reasonably
possible with each other and with TXEN's insurers, in attempts to defend or
settle such Proceeding.
7. ASSUMPTION OF DEFENSE. Except as otherwise provided below, to the
extent that it may wish, TXEN jointly with any other indemnifying party
similarly notified will be entitled to assume Indemnitee's defense in any
Proceeding, with counsel mutually satisfactory to Indemnitee and TXEN. After
notice from TXEN to Indemnitee of TXEN's election to assume such defense, TXEN
will not be liable to Indemnitee under this Agreement for 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 counsel in such Proceeding, but the fees and
expenses of such counsel incurred after notice from TXEN of its assumption of
the defense thereof shall be at Indemnitee's expense unless:
(a) The employment of counsel by Indemnitee has been authorized by
TXEN;
(b) Counsel employed by TXEN initially is unacceptable or later
becomes unacceptable to Indemnitee and such unacceptability
is reasonable under then existing circumstances;
(c) Indemnitee shall have reasonably concluded that there may be
a conflict of interest between Indemnitee and TXEN in the
conduct of the defense of such Proceeding; or
(d) TXEN shall not have employed counsel promptly to assume the
defense of such Proceeding.
In each of these cases the fees and expenses of counsel shall be at the expense
of TXEN and subject to payment pursuant to this Agreement. TXEN shall not be
entitled to assume the defense of Indemnitee in any Proceeding brought by or on
behalf of TXEN or as to which Indemnitee shall have made either of the
conclusions provided for in clauses (b) or (c) above.
8. ENFORCEMENT. In the event that any dispute or controversy shall arise
under this Agreement between Indemnitee and TXEN with respect to whether the
Indemnitee is entitled to indemnification in connection with any Proceeding or
with respect to the amount of Expenses incurred, then with respect to each such
dispute or controversy Indemnitee may seek to enforce the Agreement through
legal action or, at Indemnitee's sole option and written request, through
arbitration. If arbitration is requested, such dispute or controversy shall be
submitted by the parties to binding arbitration in the City of Birmingham,
Alabama, before a single arbitrator agreeable to both parties. If the parties
cannot agree on a designated arbitrator within 15 days after arbitration is
requested in writing by Indemnitee, the arbitration shall proceed in the City of
Birmingham, Alabama, before an arbitrator appointed by the American Arbitration
Association. In either case, the
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arbitration proceeding shall commence promptly under the rules then in effect of
that Association. The arbitrator agreed to by the parties or appointed by that
Association shall be an attorney other than an attorney who has been or is
associated with a firm having associated with it an attorney who has been
retained by or performed services for TXEN or Indemnitee at any time during the
five years preceding the commencement of arbitration. The award shall be
rendered in such form that judgment may be entered thereon in any court having
jurisdiction thereof. The prevailing party shall be entitled to prompt
reimbursement of any costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred in connection with such legal action or
arbitration; provided that Indemnitee shall not be obligated to reimburse TXEN
unless the arbitrator or court which resolves the dispute determines that
Indemnitee acted in bad faith in bringing such action or arbitration.
9. EXCLUSIONS. Notwithstanding the scope of indemnification which may be
available to Indemnitee from time to time under any Applicable Document, no
indemnification, reimbursement or payment shall be required of TXEN hereunder
with respect to:
(a) Any claim or any part thereof as to which Indemnitee shall
have been adjudged by a court of competent jurisdiction from
which no appeal is or can be taken to have acted in willful
misfeasance, or willful disregard of his duties, except to
the extent that such 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 as the
court shall deem proper;
(b) Any claim or any part thereof arising under Section 16(b) of
the Securities Exchange Act of 1934 pursuant to which
Indemnitee shall be obligated to pay any penalty, fine,
settlement or judgment;
(c) Any obligation of Indemnitee based upon or attributable to
the Indemnitee gaining in fact any personal gain, profit or
advantage to which he was not entitled; or
(d) Any Proceeding initiated by Indemnitee without the consent or
authorization of the Board of Directors of TXEN, provided
that this exclusion shall not apply with respect to any
claims brought by Indemnitee to enforce his rights under this
Agreement or in any Proceeding initiated by another person or
entity whether or not such claims were brought by Indemnitee
against a person or entity who was otherwise a party to such
Proceeding.
Nothing in this Section 9 shall eliminate or diminish TXEN's obligations to
advance that portion of Indemnitee's Expenses which represent attorneys' fees
and other costs incurred in defending any Proceeding pursuant to Section 3 of
this Agreement.
10. EXTRAORDINARY TRANSACTIONS. TXEN covenants and agrees that, in the
event of any merger, consolidation or reorganization in which TXEN is not the
surviving entity, any sale of all or substantially all of the assets of TXEN or
any liquidation of TXEN (each such event is hereinafter referred to as an
"Extraordinary Transaction"), TXEN shall:
(a) Have the obligations of TXEN under this Agreement expressly
assumed by the survivor, purchaser or successor, as the case
may be, in such Extraordinary Transaction; or
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(b) Otherwise adequately provide for the satisfaction of the
Company's obligations under this Agreement, in a manner
acceptable to Indemnitee.
11. NO PERSONAL LIABILITY. Indemnitee agrees that neither the directors nor
any officer, employee, representative or agent of TXEN shall be personally
liable for the satisfaction of TXEN's obligations under this Agreement, and
Indemnitee shall look solely to the assets of TXEN for satisfaction of any
claims hereunder.
12. SEVERABILITY. If any provision, phrase, or other portion of this
Agreement should be determined by any court of competent jurisdiction to be
invalid, illegal or unenforceable, in whole or in part, and such determination
should become final, such provision, phrase or other portion shall be deemed to
be severed or limited, but only to the extent required to render the remaining
provisions and portions of the Agreement enforceable, and the Agreement as thus
amended shall be enforced to give effect to the intention of the parties
insofar as that is possible.
13. SUBROGATION. In the event of any payment under this Agreement, TXEN
shall be subrogated to the extent thereof to all rights to indemnification or
reimbursement against any insurer or other entity or person vested in the
Indemnitee, who shall execute all instruments and take all other actions as
shall be reasonably necessary for TXEN to enforce such rights.
14. GOVERNING LAW. The parties hereto agree that this Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of Alabama.
15. NOTICES. All notices, xxxxxxxx, requests, demands, approvals, consents,
and other communications which are required or may be given under this
Agreement shall be in writing and will be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid to the parties at their respective addresses set
forth below:
IF TO TXEN: IF TO INDEMNITEE:
Mr. H. Grey Wood
Xxxxxxx TXEN Corporation
00 Xxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
or to such other or further address as shall be designated from time to time by
the Indemnitee or TXEN to the other.
16. TERMINATION. This Agreement may be terminated by either party upon not
less than ninety (90) days prior written notice delivered to the other party,
but termination shall not in any way diminish the obligations of TXEN hereunder
with respect to Indemnitee's activities prior to the effective date of
termination.
17. AMENDMENTS AND BINDING EFFECT. This Agreement and the rights and duties
of Indemnitee and TXEN hereunder may not be amended, modified or terminated
except by written instrument signed and delivered by the parties hereto. This
Agreement is and shall be binding upon and shall inure to the benefits of the
parties thereto and their respective heirs, executors, administrators,
successors and assigns.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement in
triplicate as of the date first above written.
Xxxxxxx TXEN Corporation
By:
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Xxxx X. Xxxxxx
Chief Executive Officer
Indemnitee
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