EXHIBIT 10.26
FORM OF INDEMNIFICATION AGREEMENT
AGREEMENT, made and entered into as of _____________, between Security
Capital Group Incorporated, a Maryland corporation (the "Corporation"), and
______________ ("Indemnitee").
WHEREAS, the Corporation is a Maryland corporation; and
WHEREAS, at the request of the Corporation, Indemnitee currently serves as
a director or officer of the Corporation and may, therefore, be subjected to
claims, suits or proceedings arising as a result of his service; and
WHEREAS, as an inducement to Indemnitee to continue to serve as such
director or officer, the Corporation has agreed to indemnify Indemnitee against
expenses and costs incurred by Indemnitee in connection with any such claims,
suits or proceedings, to the fullest extent that is lawful; and
WHEREAS, the parties by this Agreement desire to set forth their agreement
regarding indemnification;
NOW, THEREFORE, parties agree as follows:
1. Acts or Omissions Covered by This Agreement. This Agreement shall
cover any act or omission by Indemnitee after the date of his commencement of
service as a director or officer, regardless of whether said act or omission
occurred prior to the date of this Agreement, which (i) occurs or is alleged to
have occurred by reason of his being or having been a director or officer, (ii)
occurs or is alleged to have occurred, during or after the time when the
Indemnitee served as a director or officer and (iii) gives rise to, or is the
direct or indirect subject of a claim in any threatened, pending or completed
action, suit or proceeding at any time or times whether during or after his
service as director or officer.
2. Indemnity.
(a) The Corporation hereby agrees to indemnify, and keep indemnified in
accordance with, and to the fullest lawful extent permitted by the
Corporation's Amended and Restated Certificate of Incorporation and
bylaws on the date of execution hereof, and regardless of any
subsequently enacted bylaw or amendment to the Amended and Restated
Certificate of Incorporation to the contrary, Indemnitee, from and
against any and all expenses (including attorney's fees), judgments,
fines, taxes, penalties and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that
he is or was a director or officer of the Corporation or is or was
serving at the request of
the Corporation as a director, trustee, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise and whether or not such action is by or in the right of the
Corporation or that other corporation, partnership, joint venture,
trust or other enterprise with respect to which the Indemnitee serves
or has served.
(b) Notwithstanding anything to the contrary in subsection (a), the
Corporation agrees to indemnify Indemnitee in a suit or proceeding
initiated by the Indemnitee only if Indemnitee acted with the
authorization of the Corporation in initiating that suit or
proceeding. However, an arbitration proceeding brought under Section 8
shall not be subject to this subsection (b).
(c) An indemnification under this Agreement shall be made upon
Indemnitee's written request to the board of directors, setting forth
the grounds and lawfulness of such indemnification. If the board of
directors disagrees with Indemnitee, such disagreement shall be
resolved by a decision of the arbitrators in an arbitration proceeding
pursuant to Section 8. For purposes of this Agreement, references to
"other enterprises" shall include, without limitation, employee
benefit plans; references to "fines" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall
include any service as a trustee, director, officer, employee or agent
of any other partnership, trust or corporation which imposes duties
on, or involves services by, Indemnitee which are requested in writing
by the board of directors, or which involve services by, such trustee,
director, officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries.
3. Burden of Proof. Indemnitee shall be presumed to be entitled to
indemnification for any act or omission covered in Section 1 or 2 of this
Agreement. The burden of proof of establishing that Indemnitee is not entitled
to indemnification because of the failure to fulfill some requirement of
Maryland law, the Corporation's Amended and Restated Certificate of Corporation
or bylaws as in effect on the date of execution hereof, or this Agreement shall
be on the Corporation.
4. Notice by Indemnitee. Indemnitee shall notify the Corporation in
writing of any matter with respect to which Indemnitee intends to seek
indemnification hereunder as soon as reasonably practicable following the
receipt by Indemnitee of written threat thereof, provided that failure to so
notify the Corporation shall not constitute a waiver by Indemnitee of his rights
hereunder.
5. Advancement of Expenses. In the event of any action, suit or
proceeding against Indemnitee which may give rise to a right of indemnification
from the Corporation pursuant to this Agreement, following written request to
the Corporation by Indemnitee, the Corporation shall advance to Indemnitee
amounts to cover expenses incurred by Indemnitee in
defending the action, suit or proceeding in advance of final disposition upon
receipt of (i) an undertaking by or on behalf of Indemnitee to repay the amount
advanced in the event that it shall be ultimately determined in accordance with
Section 3 of this Agreement that he is not entitled to indemnification by the
Corporation, and (ii) satisfactory evidence as to the amount of such expenses.
Indemnitee's written certification together with a copy of the statement paid or
to be paid by Indemnitee shall constitute satisfactory evidence unless
determined to the contrary in an arbitration proceeding conducted pursuant to
Section 8 of this Agreement.
6. Non-Exclusivity of Right of Indemnification. The indemnification
rights granted to Indemnitee under this Agreement shall not be deemed exclusive
of, or in limitation of, any rights to which Indemnitee may be entitled under
Maryland law, the Corporation's Amended and Restated Certificate of
Incorporation bylaws, any other agreement, vote of stockholders or directors or
otherwise.
7. Termination of Agreement and Survival of Right of Indemnification.
(a) Subject to subparagraph (b) of this section, this Agreement shall
terminate when the Indemnitee's term of office as a director or
officer ends.
(b) The rights granted to Indemnitee hereunder shall continue after
termination as provided in Section 1 and shall inure to the benefit of
Indemnitee, his personal representative, heirs, executors,
administrators and beneficiaries, and this Agreement shall be binding
upon the Corporation, its successors and assigns.
8. Arbitration of All Disputes Concerning Entitlement. Any controversy
or claim arising out of or relating to the Indemnitee's entitlement to
indemnification under this Agreement shall be settled by arbitration in the
State of Illinois by three arbitrators, one of whom shall be appointed by the
Corporation, one by Indemnitee and the third of whom shall be appointed by the
first two arbitrators. If the first two arbitrators cannot agree on the
appointment of a third arbitrator or if either party fails to appoint an
arbitrator, then that arbitrator shall be appointed by the Chief Judge of the
appropriate United States Court of Appeals. The arbitration shall be conducted
in accordance with the rules of the American Arbitration Association. Judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Interest on any judgment shall be assessed at a rate or
rates the arbitrators consider just under the circumstances. If it is necessary
or desirable for Indemnitee to retain legal counsel or incur other costs and
expenses (including, without limitation, travel costs and expenses) in
connection with enforcement of his rights under this Agreement, the Corporation
shall pay his reasonable attorneys' fees and reasonable costs and expenses in
connection with enforcement of his rights (including the enforcement of any
arbitration award in court), regardless of the final outcome, unless the
arbitrators determine that under the circumstances recovery by Indemnitee of all
or a part of any such fees and costs and expenses would be unjust.
9. Governing Law.
(a) Except as provided for in subparagraph (b) of this section, this
Agreement shall
be governed by the laws of the State of Maryland.
(b) Any arbitration under this Agreement shall be governed by the laws of
the State of Illinois.
10. Severability. If any provision of this Agreement is determined to be
invalid or unenforceable, the invalidity or unenforceability shall not affect
the validity or enforceability of any other provision of this Agreement, and
this Agreement shall be interpreted as though the invalid or unenforceable
provision was not a part of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above stated.
SECURITY CAPITAL GROUP INCORPORATED
By ________________________________
INDEMNITEE
____________________________________
