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EXHIBIT(c)(3)
FORM OF INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "Agreement") dated as of , is
made by and between Brylane Inc., a Delaware corporation (the "Company"), on the
one hand, and (the "Indemnitee"), on the other hand.
R E C I T A L S :
A. Section 3.1 of the Bylaws of the Company (the "Bylaws") provides that,
except as set forth therein, the business and affairs of the Company shall be
managed by or under the direction of a Board of Directors of the Company (the
"Board"). The members of the Board of Directors are hereinafter referred to
individually as a "Director" and collectively as the "Directors."
B. The Company recognizes that competent and experienced persons are
increasingly reluctant to serve as members of the boards of corporations unless
they are protected by comprehensive liability insurance or indemnification, or
both, due to increased exposure to litigation costs and risks resulting from
their service to such corporations, and due to the fact that the exposure
frequently bears no reasonable relationship to the compensation of such persons.
C. The statutes and judicial decisions regarding the duties of such
persons who serve on boards of corporations are often difficult to apply,
ambiguous, or conflicting, and therefore fail to provide such persons with
adequate, reliable knowledge of legal risks to which they are exposed or
information regarding the proper course of action to take.
D. Each of the Company and the Indemnitee recognizes that plaintiffs often
seek damages in such large amounts and the costs of litigation may be so
substantial (whether or not the case is meritorious), that the defense and/or
settlement of such litigation is often beyond the personal resources of such
persons who serve on boards of corporations.
E. The Company believes that it is unfair for its Directors to assume the
risk of substantial judgments and other expenses which may occur in cases in
which the Director received no personal profit and in cases where the Director
acted in good faith.
F. Section 145 of the General Corporation Law of Delaware ("Section 145")
empowers a corporation to indemnify its directors by agreement and to indemnify
persons who serve, at the request of such corporations, as the director of other
corporations or enterprises, and expressly provides that the indemnification
provided by Section 145 is not exclusive.
G. The Board has determined that contractual indemnification as set forth
herein is not only reasonable and prudent but necessary to promote the best
interests of the Company and its stockholders.
H. The Company desires and has requested the Indemnitee to serve or
continue to serve as a Director of the Company.
I. The Indemnitee only is willing to serve, or to continue to serve, as a
Director of the Company, provided that the Indemnitee is furnished the indemnity
provided for herein by the Company.
A G R E E M E N T :
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth below, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions.
(a) Agent. For purposes of this Agreement, "agent" of the Company means
any person who: (i) is or was a Director of the Company or a director of a
subsidiary of the Company; or (ii) is or was serving at the
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request of, for the convenience of, or to represent the interest of the Company
or a subsidiary of the Company as a representative or director of another
foreign or domestic corporation, partnership or joint venture.
(b) Expenses. For purposes of this Agreement, "expenses" includes all
direct and indirect costs of any type of nature whatsoever (including, without
limitation, all attorneys' fees and related disbursements, other out-of-pocket
costs and reasonable compensation for time spent by the Indemnitee for which she
is not otherwise compensated by the Company or any third party, provided that
the rate of compensation and estimated time involved is approved in advance by
the Board), actually and reasonably incurred by the Indemnitee in connection
with either the investigation, defense or appeal of a proceeding or establishing
or enforcing a right to indemnification under this Agreement, Section 145 or
otherwise, and amounts paid in settlement by or on behalf of the Indemnitee.
(c) Proceedings. For the purposes of this Agreement, "proceeding" means
any threatened, pending, or completed action, suit or other proceeding, whether
civil, criminal, administrative, investigative or any other type whatsoever.
(d) Subsidiary. For purposes of this Agreement, "subsidiary" means any
corporation or partnership of which more than 50% of the outstanding voting
securities or partnership interests, as the case may be, are owned directly or
indirectly by the Company, by the Company and one or more other subsidiaries, or
by one or more other subsidiaries.
2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to
serve as an agent of the Company, at the will of the Company (or under separate
agreement, if such agreement exists), in the capacity the Indemnitee currently
serves as an agent of the Company, so long as the Indemnitee is duly appointed
or elected and qualified in accordance with the applicable provisions of the
applicable partnership agreement or bylaws of each of such partnerships,
corporations or of any subsidiary thereof, or until such time as the Indemnitee
tenders his or her resignation in writing; provided, however, that nothing
contained in this Agreement is intended to create any right to continued
employment of the Indemnitee in any capacity.
3. Indemnification.
(a) Indemnification in Third Party Proceedings. Subject to Section 10
below, the Company shall indemnify the Indemnitee if the Indemnitee is a party
to or threatened to be made a party to or otherwise involved in any proceeding
(other than a proceeding by or in the name of the Company to procure a judgment
in its favor) by reason of the fact that the indemnitee is or was an agent of
the Company, or by reason of any act or inaction by him or her in any such
capacity, against any and all expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, fines and penalties), actually and
reasonably incurred by him or her in connection with the investigation, defense,
settlement or appeal of such proceeding, but only if the Indemnitee acted in
good faith and in a manner she reasonably believed to be in, or not opposed to,
the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any proceeding by judgment, order of court, settlement,
conviction or on plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that the Indemnitee did not act in good faith in a
manner which she reasonably believed to be in, or not opposed to, the best
interests of the Company, and with respect to any criminal proceedings, that
such person had reasonable cause to believe that his or her conduct was
unlawful.
(b) Indemnification in Derivative Actions. Subject to Section 10 below,
the Company shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any proceeding by or
in the name of the Company or a subsidiary of the Company to procure a judgment
in its favor by reason of the fact that the Indemnitee is or was an agent of the
Company or a subsidiary of the Company, or by reason of any act or inaction by
him or her in any such capacity, against all expenses actually and reasonably
incurred by the Indemnitee in connection with the investigation, defense,
settlement, or appeal of such proceedings, but only if the Indemnitee acted in
good faith and in a manner she reasonably believed to be in, or not opposed to,
the best interests of the Company or a subsidiary of the Company, except that no
indemnification under this Section 3 shall be made in respect of any claim,
issue or matter as to which the Indemnitee shall have been finally adjudged to
be liable to the Company or a subsidiary of the Company by a
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court of competent jurisdiction due to willful misconduct of a culpable nature
in the performance of the Indemnitee's duty to the Company or a subsidiary of
the Company, unless and only to the extent that any court in which such
proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as such
court shall deem proper.
4. Indemnification of Expenses of Successful Party. Notwithstanding any
other provisions of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any proceeding or in defense
of any claim, issue or matter therein, including the dismissal of any action
without prejudice, the Company shall indemnify the Indemnitee against all
expenses actually and reasonably incurred in connection with the investigation,
defense or appeal of such proceeding.
5. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines or penalties) actually and reasonably incurred
by him or her in the investigation, defense, settlement or appeal of a
proceeding but is not entitled, however, to indemnification for the total amount
thereof, the Company shall nevertheless indemnify the Indemnitee for the portion
thereof to which the Indemnitee is entitled.
6. Advancement of Expenses. Subject to Section 10(b) below, the Company
shall advance all expenses incurred by the Indemnitee in connection with the
investigation, defense, settlement or appeal of any proceeding to which the
Indemnitee is a party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an agent of the Company. The Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that the Indemnitee is not entitled to be
indemnified by the Company as authorized by this Agreement. The advances to be
made hereunder shall be paid by the Company to or on behalf of the Indemnitee
within 30 days following delivery of a written request therefor by the
Indemnitee to the Company.
7. Notice and Other Indemnification Procedures.
(a) Notification of Proceeding. Promptly after receipt by the Indemnitee
of notice of the commencement of or the threat of commencement of any
proceeding, the Indemnitee shall, if the Indemnitee believes that
indemnification with respect thereto may be sought from the Company under this
Agreement, notify the Company of the commencement or threat of commencement
thereof.
(b) Request for Indemnification. Any indemnification requested by the
Indemnitee under Section 3 hereof shall be made no later than 10 days after
receipt of the written request of the Indemnitee, unless a good faith
determination is made within said 10-day period (i) by the Board by a majority
vote of a quorum thereof consisting of Directors who are not parties to such
proceedings; or (ii) in the event such a quorum is not obtainable, at the
election of the Company, either by independent legal counsel in a written
opinion or by a panel of arbitrators, one of whom is selected by the Company,
another of whom is selected by the Indemnitee and the last of whom is selected
by the first two arbitrators so selected, that the Indemnitee is not or (subject
to final judgment or other final adjudication as provided in Section 10(a)
below) ultimately will not be entitled to indemnification hereunder.
(c) Application for Enforcement. Notwithstanding a determination under
Section 7(b) above that the Indemnitee is not entitled to indemnification with
respect to any specific proceeding, the Indemnitee shall have the right to apply
to any court of competent jurisdiction for the purpose of enforcing the
Indemnitee's right to indemnification pursuant to this Agreement. Neither the
failure of the Company (including its Board or independent legal counsel or the
panel of arbitrators) to have made a determination prior to the commencement of
such action that the Indemnitee is entitled to indemnification hereunder, nor an
actual determination by the Company (including its Board or independent legal
counsel or the panel of arbitrators) that the Indemnitee is not entitled to
indemnification hereunder, shall be a defense to the action or create any
presumption that the Indemnitee is not entitled to indemnification hereunder.
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(d) Indemnification of Certain Expenses. The Company shall indemnify the
Indemnitee against all expenses incurred in connection with any hearing or
proceeding under this Section 7 if the Indemnitee prevails in such hearing or
proceeding.
8. Assumption of Defense. In the event the Company shall be obligated to
pay the expenses of any proceeding against the Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such proceeding, with
counsel reasonably acceptable to the Indemnitee, upon the delivery to the
Indemnitee of written notice of its election to do so. After delivery of such
notice, approval of such counsel by the Indemnitee and the retention of such
counsel by the Company, the Company shall not be liable to the Indemnitee under
this Agreement for any fees of counsel subsequently incurred by the Indemnitee
with respect to the same proceeding, provided that (a) the Indemnitee shall have
the right to employ his or her counsel in such proceeding at the Indemnitee's
expense; and (b) if (i) the employment of counsel by the Indemnitee has been
previously authorized in writing by the Company, (ii) the Indemnitee's counsel
delivers a written notice to the Company stating that such counsel has
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of any such defense or (iii) the
Company shall not, in fact, have employed counsel to assume the defense of such
proceeding within a reasonable time, then in any such event the fees and
expenses of the Indemnitee's counsel shall be at the expense of the Company.
9. Insurance. The Company may, but is not obligated to, obtain liability
insurance ("D&O Insurance") as may be or become available with respect to which
the Indemnitee is named as an insured. Notwithstanding any other provision of
this Agreement, the Company shall not be obligated to indemnify the Indemnitee
for expenses, judgments, fines or penalties which have been paid directly to the
Indemnitee by D&O Insurance. If the Company has D&O Insurance in effect at the
time the Company receives from the Indemnitee any notice of the commencement of
a proceeding, the Company shall give prompt notice of the commencement of such
proceeding to the insurers in accordance with the procedures set forth in the
policy. 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 policy.
10. Exceptions.
(a) Certain Matters. Any provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement to
indemnify the Indemnitee on account of any proceeding with respect to (i)
remuneration paid to the Indemnitee if it is determined by final judgment or
other final adjudication that such remuneration was in violation of law, (ii)
which final judgment is rendered against the Indemnitee for an accounting of
profits made from the purchase or sale by the Indemnitee of securities of the
Company or any affiliate of the Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions
of any federal, state or local statute, or (iii) which (but only to the extent
that) it is determined by final judgment or other final adjudication that the
Indemnitee's conduct was in bad faith, knowingly fraudulent or deliberately
dishonest. For purposes of the foregoing sentence, a final judgment or other
adjudication may be reached in either the underlying proceeding or action in
connection with which indemnification is sought or a separate proceeding or
action to establish rights and liabilities under this Agreement.
(b) Claims Initiated by the Indemnitee. Any provision herein to the
contrary notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement to indemnify or advance expenses to the Indemnitee with
respect to proceedings or claims initiated or brought voluntarily by the
Indemnitee and not by way of defense, except with respect to proceedings brought
to establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Section 145, but such
indemnification or advancement of expenses may be provided by the Company in
specific cases if the Board finds it to be appropriate.
(c) Action for Indemnification. Any provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee for any expenses
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incurred by the Indemnitee with respect to any proceeding instituted by the
Indemnitee to enforce or interpret this Agreement if the Indemnitee does not
prevail in such proceeding.
(d) Unauthorized Settlements. Any provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee under this Agreement for any amounts
paid in settlement of a proceeding effected without the Company's written
consent. Neither the Company nor the Indemnitee shall unreasonably withhold
consent to any proposed settlement; provided, however, that the Company may in
any event decline to consent to (or to otherwise admit or agree to any liability
for indemnification hereunder in respect of) any proposed settlement if the
Company determines in good faith (pursuant to Section 7(b) above) that the
Indemnitee is not or ultimately will not be entitled to indemnification
hereunder.
(e) Securities Act Liabilities. Any provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee or otherwise act in violation of any
undertaking appearing in and required by the rules and regulations promulgated
under the Securities Act of 1933, as amended (the "Act") in any registration
statement filed with the Securities and Exchange Commission under the Act. The
Indemnitee acknowledges that paragraph (h) of Item 512 of Regulation S-K
currently generally requires the Company to undertake in connection with any
registration statement filed under the Act to submit the issue of the
enforceability of the Indemnitee's rights under this Agreement in connection
with any liability under the Act on public policy grounds to a court of
appropriate jurisdiction and to be governed by any final adjudication of such
issue. The Indemnitee specifically agrees that any such undertaking shall
supersede the provisions of this Agreement and to be bound by any such
undertaking.
11. Nonexclusivity. The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnitee may have under any provision of law or the Bylaws,
in any court in which a proceeding is brought, the vote of the disinterested
members of the Board, other agreements or otherwise, both as to action in the
Indemnitee's official capacity and to action in another capacity while occupying
his or her position as an agent of the Company, and the Indemnitee's rights
hereunder shall continue after the Indemnitee has ceased acting as an agent of
the Company and shall inure to the benefit of the heirs, executors and
administrators of the Indemnitee. Any provision herein to the contrary
notwithstanding, the Company may provide, in specific cases, the Indemnitee with
full or partial indemnification if the Board determines that such
indemnification is appropriate. This Agreement shall not be construed to
restrict any right to indemnification that the Indemnitee may otherwise have
under the Bylaws.
12. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who, at the request and expense of the Company,
shall execute all papers required and shall do everything that may be reasonably
necessary to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.
13. Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law.
14. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever, (a)
the validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 13 hereof.
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15. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.
16. Successors and Assigns. The terms of this Agreement shall bind, and
shall inure to the benefit of, the successors and assigns of the parties hereto.
17. Notice. Except as otherwise provided herein, any notice or demand
which, by the provisions hereof, is required or which may be given to or served
upon the parties hereto shall be in writing and, if by telegram, telecopy or
telex, shall be deemed to have been validly served, given or delivered when
sent, if by personal delivery, shall be deemed to have been validly served,
given or delivered upon actual delivery and, if mailed, shall be deemed to have
been validly served, given or delivered upon actual delivery and, if mailed,
shall be deemed to have been validly served, given or delivered three business
days after deposit in the United States mails, as registered or certified mail,
with proper postage prepaid and addressed to the party or parties to be notified
at the addresses set forth on the signature page of this Agreement (or such
other address(es) as a party may designate for itself by like notice).
18. Governing Law. This Agreement and the rights of the parties hereunder
shall be governed exclusively by and construed according to the laws of the
State of Delaware, and all rights and remedies shall be governed by such laws
without regard to principles of conflicts of laws.
19. Statement of Intent. It is the intent of the parties to this Agreement
that the provisions of this Agreement should be enforced to the same extent as
if such provisions were expressly set forth in the Bylaws.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
effective as of the date first above written.
THE COMPANY:
BRYLANE INC.,
a Delaware corporation
By:
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Name: Xxxxxx X. Xxxxxxxx
Its: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
Address: 000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
THE INDEMNITEE:
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Name:
Address:
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