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SETTLEMENT AGREEMENT, RESIGNATION,
AND FULL GENERAL RELEASE
This Settlement Agreement, Resignation, and Release ("Agreement") is made
and entered into on January 6, 1998 by and between PAYLESS CASHWAYS, INC.
("PAYLESS") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (" ▇▇▇▇▇▇▇").
WHEREAS, ▇▇▇▇▇▇▇ was employed by PAYLESS on March 7, 1983 and is entitled
to the benefits of an Employment Agreement dated as of February 8, 1993, as
amended as of October 17, 1996, June 30, 1997 and August 20, 1997, (the
"Employment Agreement") ; and
WHEREAS, PAYLESS and ▇▇▇▇▇▇▇ mutually wish to terminate the employment
status of ▇▇▇▇▇▇▇, and STANTON'S employment with PAYLESS shall end on January
13, 1998; and
WHEREAS, PAYLESS AND ▇▇▇▇▇▇▇ have agreed that ▇▇▇▇▇▇▇ shall resign as
President and Chief Operating Officer and as a Director, but that for purposes
of her severance benefits ▇▇▇▇▇▇▇'▇ termination shall be regarded as a
termination of her employment without cause by PAYLESS;
NOW THEREFORE, in consideration of the mutual promises, agreements and
releases contained in this Agreement, the parties agree as follows:
1. A. PAYLESS' AGREEMENTS
1. EFFECTIVE DATE.
PAYLESS acknowledges that the effective date of this Agreement shall be
January 13, 1998 (the "Effective Date") and that ▇▇▇▇▇▇▇ will not be required to
perform services for PAYLESS after the Effective Date.
2. SEVERANCE BENEFITS
PAYLESS agrees to provide ▇▇▇▇▇▇▇ the ▇▇▇▇▇▇▇▇▇ benefits set forth below.
1. Lump Sum Payment.
(1) PAYLESS agrees to pay ▇▇▇▇▇▇▇ on the Effective Date a lump
sum payment (less applicable payroll deductions) in the amount set forth on
Schedule I hereto. As set forth in Schedule 1, such lump sum payment consists of
(A) the amount that ▇▇▇▇▇▇▇ would have received as base salary from the
Effective Date through March 1, 1999 (the "Severance Period") (based on her base
salary in effect on January 5, 1998), (B) the remaining amount due ▇▇▇▇▇▇▇ under
the PAYLESS Reorganization Retention Plan, and (C) an amount
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for unused earned vacation days through the Effective Date. In addition, PAYLESS
shall pay ▇▇▇▇▇▇▇ on the Effective Date or as promptly thereafter as is
practicable an amount equal to any previously unreimbursed business expenses.
(2) PAYLESS also agrees to pay, in lieu of matching contributions
to the Payless Cashways, Inc. Employee Savings Plan which would otherwise have
been made on ▇▇▇▇▇▇▇'▇ behalf during the Severance Period, and in partial
consideration for the Release of Liability contained herein in Paragraph B.2, an
additional lump sum payment (less applicable payroll deductions) of $20,000
(Twenty Thousand Dollars).
2. Continuation of Benefits. PAYLESS agrees that during the Severance
Period it will provide ▇▇▇▇▇▇▇ with health, life (including supplemental death
benefits), dental and disability (including supplemental disability) benefits
and other benefits substantially equivalent to those that ▇▇▇▇▇▇▇ was receiving
or entitled to receive under the Employment Agreement on January 5, 1998. Such
benefits are described in Schedule II and shall be provided during the Severance
Period (or, if longer, the period during which such benefits would have been
provided at PAYLESS' expense under applicable plans of PAYLESS in effect on
January 5, 1998). Except as may be indicated in Schedule II, such benefits shall
be provided at the same coverage levels that were in effect on January 5, 1998,
and such benefits shall be provided at PAYLESS' expense, subject to the same
cost sharing provisions, if any, as existed on such date. After the Severance
Period, ▇▇▇▇▇▇▇ shall be eligible for COBRA continuation coverage of health,
life (including supplemental death benefits), dental and disability (including
supplemental disability) benefits for a period of 18 months or such period as
may then be provided by law. ▇▇▇▇▇▇▇ shall not be entitled to receive such
benefits to the extent that she obtains other employment prior to the end of the
Severance Period that provides comparable benefits, provided, however, that
▇▇▇▇▇▇▇ is under no obligation to seek other employment during such period.
3. Retirement Benefits. PAYLESS agrees that for purposes of
determining the benefits payable to ▇▇▇▇▇▇▇ under the Payless Cashways, Inc.
Amended Retirement Plan (the "Pension Plan") and ▇▇▇▇▇▇▇'▇ eligibility therefor,
▇▇▇▇▇▇▇'▇ date of separation from PAYLESS shall be deemed to be March 1, 1999,
her age shall be deemed to be her age on such date and the amount allocable to
base pay included in the lump sum payment in Paragraph A.2.a (i) shall be
included in determining career average pay. If the terms of the Pension Plan do
not permit the forgoing, then on the Effective Date PAYLESS shall pay ▇▇▇▇▇▇▇ an
amount equal to the present value of the additional retirement benefits that
would have accrued had she continued to perform services for PAYLESS through the
Severance Period at the same rate of compensation as was in effect on January 5,
1998. The present value payable hereunder shall be calculated using GATT rate
currently in effect under the Pension Plan.
4. Automobile. PAYLESS also agrees to a lump sum payment (less
applicable payroll deductions) of $11,668.66 in lieu of car allowance to be paid
on the Effective Date. ▇▇▇▇▇▇▇ and PAYLESS agree that the lease of her company
car will be terminated.
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3. DEATH OF ▇▇▇▇▇▇▇
The death of ▇▇▇▇▇▇▇ prior to the expiration of this Agreement will not
void this Agreement, but the terms thereof will survive her death. In the event
that ▇▇▇▇▇▇▇ dies prior to receipt of all sums set forth in section A.2. above,
then any and all such remaining sums not yet received by ▇▇▇▇▇▇▇ otherwise due
under this Agreement shall become due and payable to the beneficiaries
hereinafter listed: Principal Beneficiary: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Living Trust dated
August, 1989.
4. STOCK INCENTIVE
The parties acknowledge that ▇▇▇▇▇▇▇ has no vested stock incentives.
5. OUT PLACEMENT
PAYLESS will provide ▇▇▇▇▇▇▇ at PAYLESS' expense with telephone answering
and e-mail services at Payless for a period of 60 days and executive-level out
placement services at an out placement service of PAYLESS' choice in the Kansas
City area, including an office and telephone transfer services, until she
obtains other employment, for a maximum of 18 months.
6. INDEMNIFICATION
Set forth as Schedules III through V hereto are provisions of PAYLESS
Certificate of Incorporation and Bylaws relating to indemnification of directors
and officers and an Indemnification Agreement dated November 26, 1997, between
PAYLESS and ▇▇▇▇▇▇▇ (collectively "Indemnification Provisions"). Such
Indemnification Provisions are incorporated by this reference and made a part of
this Agreement in their entirety. PAYLESS acknowledges and agrees that ▇▇▇▇▇▇▇
and her estate are entitled to the benefit of such Indemnification Provisions
notwithstanding her termination of service and that such provisions apply to her
service as a director and officer of PAYLESS and any of its predecessors.
PAYLESS further acknowledges that the Indemnification Provisions obligate
PAYLESS, among other matters, to indemnify ▇▇▇▇▇▇▇ against any and all
expenses(including costs and attorneys' fees) which she might incur as a witness
or party with respect to that certain matter pending in the United States
District Court for the Southern District of Iowa captioned PAYLESS Cashways,
Inc. Partners [et. al.] v. PAYLESS Cashways, Inc. [et. al.]. PAYLESS agrees to
honor such obligations with respect to such proceeding or any other proceeding
to which ▇▇▇▇▇▇▇ may become a party or witness by reason of the fact that she
served as a director or officer of PAYLESS, except as may be provided in the
Indemnification Provisions. PAYLESS further agrees that as to ▇▇▇▇▇▇▇, any
amendments or changes to the Indemnification Provisions or the insurance
coverages described in paragraph A.7 below will not adversely affect ▇▇▇▇▇▇▇
without ▇▇▇▇▇▇▇'▇ written consent, and that breach by ▇▇▇▇▇▇▇ of any provision
of this AGREEMENT will not constitute grounds by PAYLESS to change such
coverages or to terminate its obligations under this
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Agreement or otherwise with respect to the Indemnification Provisions. PAYLESS
and ▇▇▇▇▇▇▇ agree that said Indemnification Agreement is hereby amended to
delete section 9.6 thereof in its entirety.
7. LIABILITY INSURANCE
PAYLESS currently maintains $30 million in directors' and officers'
liability insurance that provides coverage for ▇▇▇▇▇▇▇ and other directors and
officers of PAYLESS. The coverage period, including the run-off provisions
provided for thereunder, continue through December 2, 2003. PAYLESS agrees to
maintain such directors' and officers' liability insurance coverage or to
provide similar coverage to ▇▇▇▇▇▇▇ so that ▇▇▇▇▇▇▇ will remain insured under
similar coverage at current levels until December 2, 2003 with respect to the
period of time that ▇▇▇▇▇▇▇ served as a director or officer of PAYLESS. PAYLESS
has given ▇▇▇▇▇▇▇ a copy of such policy and will give her a copy of any
amendment or rider promptly after it becomes effective.
8. NON-COMPETE PROVISIONS
PAYLESS agrees that the provisions of Section 5 of the Employment Agreement
do not apply after the Effective Date.
9. RELEASE OF LIABILITY
PAYLESS releases ▇▇▇▇▇▇▇ of all claims and demands of any kind, known or
unknown, which it may have against ▇▇▇▇▇▇▇ as of the Effective Date or which it
may have had at any time before the Effective Date for any acts which ▇▇▇▇▇▇▇
committed or omitted during her employment with PAYLESS. PAYLESS understands
that it is releasing ▇▇▇▇▇▇▇, to the maximum extent permissible by law, from any
liability which ▇▇▇▇▇▇▇ may have had to it, known or unknown, at any time up to
and including the Effective Date.
2. ▇▇▇▇▇▇▇'▇ AGREEMENTS
1. VOLUNTARY RESIGNATION
▇▇▇▇▇▇▇ and PAYLESS acknowledge that ▇▇▇▇▇▇▇ does and she hereby does
voluntarily resign her employment as President and Chief Operating Officer and
as a Director, effective as of the Effective Date. ▇▇▇▇▇▇▇ and PAYLESS
acknowledge that the resignation which is the subject of this Agreement has been
effected by the mutual and amicable agreement of both parties. Notwithstanding
the foregoing ▇▇▇▇▇▇▇ will, at PAYLESS' request, provide transitional advisory
services to PAYLESS' acting Chief Executive Officer for a period ending April
30, 1998 and may continue to occupy her current office during the month of
January, 1998. Such service will be performed without compensation other than
reimbursement of business expenses. The hours (if any) during which ▇▇▇▇▇▇▇
performs such transitional advisory
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services on any given day shall be determined by her, although she will use
reasonable efforts to respond timely to accommodate the reasonable requests of
PAYLESS' acting Chief Executive Officer for her services.
2. RELEASE OF LIABILITY.
▇▇▇▇▇▇▇ releases PAYLESS from the terms of the Employment Agreement and
acknowledges that further obligations of ▇▇▇▇▇▇▇ and PAYLESS in that Employment
Agreement are extinguished upon execution of this Agreement, except as
specifically noted herein. ▇▇▇▇▇▇▇ understands that she is releasing PAYLESS to
the maximum extent permissible by law, from any liability which ▇▇▇▇▇▇▇ believes
PAYLESS may have had to her, at any time up to and including the date she signs
this Agreement. ▇▇▇▇▇▇▇ waives any legal right or claims ▇▇▇▇▇▇▇ may have or may
have had, including claims of race, color, national origin, sex or gender, age
or disability discrimination, arising under the Title VII of the Civil Rights
Acts of 1964, the Rehabilitation Act of 1973, the Civil Rights Act of 1866
(Section 1981), the Americans with Disabilities Act of 1990, the Employee
Retirement Income Security Act of 1974, the Age Discrimination in Employment
Act, the Family and Medical Leave Act of 1993, the Missouri Human Rights Act,
the Missouri Workers Compensation Act and the Missouri Service Letter Act and
under any other federal, state, or local statute, regulation, or common law of
any state, including any and all claims in tort or contract; provided, however,
that nothing contained in this Release of Liability shall modify or in any way
detract from the Indemnification provisions of Paragraph A.5 herein.
3. COOPERATION AGREEMENT
▇▇▇▇▇▇▇ also agrees to cooperate and assist PAYLESS in the investigation
and handling of any actual or threatened court action, arbitration or
administrative proceeding or dispute involving any matter that arose during
▇▇▇▇▇▇▇'▇ employment (including, but not limited to, testifying in deposition
and/or court and providing information to PAYLESS). PAYLESS acknowledges and
agrees that it is responsible for any and all expenses (including costs and
attorneys' fees) that ▇▇▇▇▇▇▇ may incur in connection with any such proceeding.
4. ADEQUACY OF CONSIDERATION
▇▇▇▇▇▇▇ acknowledges that the sum paid by PAYLESS under this Agreement is
adequate consideration for ▇▇▇▇▇▇▇'▇ execution of this Agreement, and further
acknowledges that the sum is in excess of the amounts to which she would be
entitled under the existing Employment Agreement, policies or practices of
PAYLESS.
5. CONFIDENTIALITY AND NON-SOLICITATION
▇▇▇▇▇▇▇ agrees that notwithstanding the provisions of this Agreement, the
provisions of Section 4 of her Employment Agreement will continue to apply in
accordance with their terms
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after the Effective Date.
3. OTHER AGREEMENTS
1. NON-DISPARAGEMENT
▇▇▇▇▇▇▇ and PAYLESS acknowledge and agree that disparaging or critical
statements made by ▇▇▇▇▇▇▇ about PAYLESS or its board members, officers and
employees of PAYLESS or disparaging statements made by board members or senior
officers of PAYLESS about ▇▇▇▇▇▇▇ would be uniquely detrimental to the interests
of both parties. Therefore, ▇▇▇▇▇▇▇ agrees to refrain from making such
disparaging or critical statements about PAYLESS, or its board members,
officers, and employees of PAYLESS, and PAYLESS agrees that PAYLESS' board
members and senior officers (i.e. the Chairman, acting Chief Executive Officer,
President, and the senior vice presidents) will refrain from making such
disparaging or critical statements about ▇▇▇▇▇▇▇. All other provisions of this
Agreement notwithstanding, PAYLESS agrees that any statements made by ▇▇▇▇▇▇▇
during any testimony given by her as part of any deposition, court hearing,
trial, arbitration hearing or similar proceeding, shall not be considered a
disparaging or critical statement and ▇▇▇▇▇▇▇ agrees that any statements made by
PAYLESS or its board members, officers, and employees of PAYLESS during any
testimony given by any of them as part of any deposition, court hearing, trial,
arbitration hearing, or similar proceeding, shall not be considered a
disparaging or critical statement.
2. NO ADMISSION OF LIABILITY
▇▇▇▇▇▇▇ acknowledges that this Agreement shall not in any way be construed
as an admission by PAYLESS of any liability on the part of PAYLESS, and that all
such liability is expressly denied by PAYLESS. Likewise, PAYLESS acknowledges
that this Agreement shall not in any way be construed as an admission by ▇▇▇▇▇▇▇
of any liability on the part of ▇▇▇▇▇▇▇ and that all such liability is expressly
denied by ▇▇▇▇▇▇▇.
3. VOLUNTARY NATURE OF AGREEMENT AND ADVICE OF COUNSEL
▇▇▇▇▇▇▇ acknowledges that she has read this Agreement and any attached
exhibits, understands their terms, and signs the Agreement voluntarily of her
own free will, without coercion or duress, and with full understanding of the
significance and binding effect of the Agreement. ▇▇▇▇▇▇▇ has consulted with her
attorney before signing this Agreement. ▇▇▇▇▇▇▇ further acknowledges that she
has been represented by counsel with respect to her pending and potential claims
and has thoroughly discussed all aspects of this Agreement with her attorney.
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4. CONSIDERATION PERIOD AND REVOCATION
▇▇▇▇▇▇▇ received this Agreement on January 6, 1998. ▇▇▇▇▇▇▇ acknowledges
that she has had a reasonable time, and has had adequate opportunity to consider
the terms of the Agreement and whether or not to enter into the Agreement.
▇▇▇▇▇▇▇ has twenty-one (21) calendar days, after the date ▇▇▇▇▇▇▇ received the
Agreement, within which to consider the Agreement, although she may return it
sooner if she desires. ▇▇▇▇▇▇▇ may revoke the Agreement by delivering a written
notice of revocation to ▇. ▇. ▇▇▇▇▇▇▇, ▇▇ ., Sr. Vice-President -
Administration/Secretary, within seven (7) calendar days after ▇▇▇▇▇▇▇ signs the
Agreement. The provisions of this Agreement will become effective and
enforceable on the Effective Date, which is the eighth (8th) calendar day
following the date ▇▇▇▇▇▇▇ signs the Agreement.
5. BINDING EFFECT
This Agreement will be binding upon ▇▇▇▇▇▇▇ and her heirs, administrators,
representatives, executors, successors and assigns, and will inure to the
benefit of PAYLESS and its successors and assigns. Similarly, this Agreement
will be binding on PAYLESS, its officers, agents and successors in interest and
assigns and will inure to the benefit of ▇▇▇▇▇▇▇ and her heirs, administrators,
representatives, executors, successors and assigns.
6. NEWS RELEASES
PAYLESS agrees that before it makes any public announcements concerning the
resignation of ▇▇▇▇▇▇▇ in any newspaper, trade publication, radio, television,
or other form of public communication, it will submit such a prepared
announcement to ▇▇▇▇▇▇▇ for her review and approval. No such announcement will
be made without the prior approval of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ agrees that her approval
shall not be unreasonably refused.
7. GOVERNING LAW
This Agreement will be interpreted and enforced in accordance with the laws
of the State of Missouri.
8. SEVERABILITY
Should any provision of this Agreement be declared or determined by a court
of competent jurisdiction to be invalid or otherwise unenforceable, the
remaining parts, terms and provisions shall continue to be valid, legal and
enforceable, and will be performed and enforced to the fullest extent permitted
by law.
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9. COMPLETE AGREEMENT
Except for the Indemnification Provisions and rights and obligations under
directors' and officers' liability insurance policy referred to in paragraphs
A.6 and A.7, which this Agreement merely supplements but which otherwise remain
in full force and effect, and except for the confidentiality and
non-solicitation provision referred to in Paragraph B.5, this Agreement contains
the entire agreement between ▇▇▇▇▇▇▇ and PAYLESS with respect to the subject
matter hereof and, except as otherwise noted herein supersedes all prior
agreements or understandings between them. No change or waiver of any part of
this Agreement will be valid unless in writing and signed by both ▇▇▇▇▇▇▇ and
PAYLESS.
10. ARBITRATION
The parties hereby agree that any dispute arising hereunder or any claim
for breach or violation of any item hereof shall be submitted to arbitration
pursuant to the rules of the American Arbitration Association ("AAA") to a panel
of three arbitrators selected by mutual agreement of the parties or, if the
parties do not mutually agree on the arbitrators, in accordance with the rules
of the AAA. The award determination of the arbitrators shall be final and
binding upon the parties without right of appeal. Either party shall have the
right to bring an action in any court of competent jurisdiction to enforce this
Paragraph and to enforce any arbitrators' award rendered pursuant to this
Paragraph. The venue for all proceedings in arbitration hereunder and for any
judicial proceedings related thereto shall be in Kansas City, Missouri.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year set forth first above written.
PAYLESS CASHWAYS, INC. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------- ----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Date: January 6, 1998
Title: Acting Chief Executive Officer
Date: January 6, 1998
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Schedule I to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement Agreement
Lump sum payment computation
Severance Period Base Salary - $ 519,231.00
Unpaid Retention Bonus 67,500.00
Unused Vacation Days
Through Effective Date 34,616.00
-----------
Total $ 621,347.00
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Schedule II to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement Agreement
Benefit Continuation
Group Medical/Vision
Group Dental
Group Long/Term Disability and Supplemental Disability
Group Life Insurance and Supplemental Death Benefits during the Severance
Period, and a $450,000 life insurance policy thereafter
Annual Physical in early 1998
1997 Tax Preparation ($1,000 limit)
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Schedule III to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement Agreement
CERTIFICATE OF INCORPORATION
INDEMNIFICATION PROVISION
ARTICLE VIII
INDEMNIFICATION; INSURANCE
The directors and officers of the corporation shall be indemnified to the
maximum extent permitted by law. Without limiting the foregoing, each person who
was or is made a party or is threatened to be made a party to any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the corporation, or is or was serving, at the request of the corporation, as
a director, officer, employee, fiduciary or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation, to the fullest extent which it is empowered to
do so by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than said law permitted the corporation to provide prior to such
amendment), against all expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such proceeding, including attorneys' fees, and such indemnification shall inure
to the benefit of his or her heirs, executors and administrators; provided,
however, that, except as provided in the bylaws of the corporation, the
corporation shall indemnify any such person seeking indemnification in
connection with a proceeding initiated by such person only if such proceeding
was authorized by the board of directors of the corporation. Expenses incurred
by a director or officer of the corporation in defending a civil or criminal
action, suit or proceeding shall be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it is ultimately determined that the director or officer is not entitled to be
indemnified by the corporation as authorized by the Delaware General Corporation
Law. The foregoing right of indemnification and advancement of expenses shall be
a contract right and shall in no way be exclusive of any other rights of
indemnification and advancement of expenses to which any such director or
officer may be entitled by law, agreement, vote of stockholders or of
disinterested directors or otherwise. All rights of indemnification and
advancement of expenses hereunder shall survive any repeal or modification of
this Article VIII as to any set of facts or proceeding then existing, shall
continue as to a person who has ceased to be an officer or director and shall
inure to the benefit of the heirs, executors and administrators of such a
director or officer. The procedures with respect to indemnification shall be set
forth in the bylaws of the corporation.
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The corporation may maintain insurance, at its expense, to protect itself
and any person who is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any such expense, liability or loss,
whether or not the corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General Corporation
Law.
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Schedule IV to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement Agreement
BYLAWS
INDEMNIFICATION PROVISIONS
ARTICLE V
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
Section 1. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation or advance of
expenses under Article VIII of the certificate of incorporation shall be made
promptly, and in any event within thirty days, upon the written request of the
director or officer. If a determination by the corporation that the director or
officer is entitled to indemnification pursuant to this Article V is required,
and the corporation fails to respond within sixty days to a written request for
indemnity, the corporation shall be deemed to have approved the request. If the
corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such request is
not made within thirty days, the right to indemnification or advances as granted
by this Article V shall be enforceable by the director or officer in any court
of competent jurisdiction. Such person's costs and expenses incurred in
connection with successfully establishing his or her right to indemnification,
in whole or in part, in any such action shall also be indemnified by the
corporation. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking, if any, has
been tendered to the corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation Law for
the corporation to indemnify the claimant for the amount claimed, but the burden
of such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the corporation
(including its board of directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
Section 2. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision or the certificate of incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
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Section 3. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V and who are or were employees or agents
of the corporation, or who are or were serving at the request of the corporation
as employees or agents of another corporation, partnership, joint venture, trust
or other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors. Expenses (including attorneys'
fees) incurred by employees and agents may be paid upon such terms and
conditions, if any, as the board of directors deems appropriate; provided, that
such expenses may only be paid by the corporation in advance of a proceeding's
final disposition upon receipt of an undertaking by or on behalf of such
employee or agent to repay such amount if it shall ultimately be determined that
he or she is not entitled to be indemnified by the corporation.
Section 4. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity at any time while this Article V and the
relevant provisions of the Delaware General Corporation Law or other applicable
law are in effect, and any repeal or modification of this Article V or any such
law shall not affect any rights or obligations then existing with respect to any
state of facts or proceeding then existing.
Section 5. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is a
director, officer, employee or agent of such constituent corporation or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.
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Schedule V to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement Agreement
INDEMNIFICATION AGREEMENT
