Exhibit 10.3
INDEMNIFICATION AGREEMENT
This Indemnification Agreement, dated effective as of
, 1996, is made by and between Arden Realty, Inc., a Maryland
corporation (the "Company"), and ______________ (the "Indemnitee").
RECITALS
A. The Company is a corporation organized under the General Laws of
the State of Maryland;
B. The charter of the Company (the "Charter") provides that the
Company has the power, to the maximum extent permitted by Maryland law in effect
from time to time, to obligate itself to indemnify the directors, officers and
employees of the Company;
C. The bylaws of the Company (the "Bylaws") provide that each
officer and director of the Company shall be indemnified by the Company to the
maximum extent permitted by Maryland law in effect from time to time; and
D. Indemnitee has been elected as of the
Company and the Company desires to fulfill its obligations to indemnify the
officers and directors to the maximum extent permitted by the Charter and the
Bylaws.
NOW, THEREFORE, the parties hereto are entering into this
Indemnification Agreement (the "Agreement") as of the date hereof to evidence
the obligation of the Company to indemnify the Indemnitee.
Section.1. DEFINITIONS. In this Agreement the following words have
the meanings indicated.
(1) "Company" includes any domestic or foreign predecessor entity of
the Company in a merger, consolidation or other transaction in which the
predecessors existence ceased upon consummation of the transaction.
(2) "Director" means any person who is or was a director of the
Company and any person who, while a director of the Company, is or was serving
at the request of the Company as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic corporation, partnership,
joint venture, trust, other enterprise, or employee benefit plan.
(3) "Expenses" include attorneys' fees.
(4) "Official Capacity" means the following:
(i) When used with respect to a Director, the office of director
in the Company;
(ii) When used with respect to a person other than a Director as
contemplated in Section 9, the elective or appointive office in the Company held
by the officer, or the employment or agency relationship undertaken by the
employee or agent on behalf of the Company; and
(iii) "Official Capacity" does not include service for any
other foreign or domestic corporation or any partnership, joint venture, trust,
other enterprise, or employee benefit plan.
(5) "Party" includes a person who was, is or is threatened to be made
a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative.
Section 2. INDEMNIFICATION OF DIRECTOR.
(1) Provided the determination required under Section 5 has been
made, the Company shall indemnify any Director made a Party to any Proceeding by
reason of service in that Director's Official Capacity unless it is established
that:
(i) The act or omission of the Director was material to the
matter giving rise to the proceeding; and
1. Was committed in bad faith; or
2. Was the result of active and deliberate dishonesty; or
(ii) The Director actually received an improper personal benefit
in money, property, or services; or
(iii) In the case of any criminal proceeding, the Director
had reasonable cause to believe that the act or omission was unlawful.
(2) (i) Indemnification shall be against judgments, penalties,
fines, settlements, and reasonable Expenses actually incurred by the Director in
connection with the Proceeding.
(ii) However, if the Proceeding was one by, or in the right of,
the Company, indemnification shall be made only against reasonable Expenses and
may not be made in respect of any liability to the Company.
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(3) (i) The termination of any Proceeding by judgment, order, or
settlement does not create a presumption that the Director did not meet the
requisite standard of conduct set forth in this Section 2.
(ii) The termination of any Proceeding by conviction, or a plea
of nolo contendere or its equivalent, or an entry of an order of probation prior
to judgment, creates a rebuttable presumption that the Director did not meet the
requisite standard of conduct set forth in this Section 2.
Section 3. NO INDEMNIFICATION OF DIRECTOR LIABILITY FOR IMPROPER
PERSONAL BENEFIT. A Director shall not be indemnified under Section 2 in
respect of any Proceeding charging improper personal benefit to the Director,
whether or not involving action in the Director's Official Capacity, in which
the Director was adjudged to be liable on the basis that personal benefit was
improperly received.
Section 4. REQUIRED INDEMNIFICATION AGAINST EXPENSES INCURRED IN
SUCCESSFUL DEFENSE.
(1) A Director who has been successful, on the merits or otherwise,
in the defense of any Proceeding shall be indemnified against reasonable
Expenses incurred by the Director in connection with the Proceeding.
(2) Nothing in this Agreement shall limit the power of a court of
appropriate jurisdiction to order indemnification of a Director to the maximum
extent permitted by Maryland law in effect from time to time, including the
right to recover the Expenses of securing such reimbursement.
Section 5. DETERMINATION THAT INDEMNIFICATION WAS PROPER.
(1) Indemnification for a specific Proceeding under Section 2 shall
not be made by the Company unless such indemnification is authorized for the
specific Proceeding after a determination has been made that indemnification of
the Director is permissible in the circumstances because the Director has met
the standard of conduct set forth in Section 2.
(2) Such determination shall be made:
(i) By the Board of Directors of the Company (the "Board") by a
majority vote of a quorum consisting of Directors not, at the time, Parties to
the Proceeding, or, if such a quorum cannot be obtained, then by a majority vote
of a committee of the Board consisting solely of two or more Directors not, at
the time, Parties to such Proceeding and who were fully designated to act in the
matter by a majority vote of the full Board in which the designated Directors
who are Parties may participate;
(ii) By special legal counsel selected by the Board or a
committee of the Board by vote as set forth in subparagraph (i) of this
paragraph, or, if the requisite quorum of the full Board cannot be obtained
therefor and the committee cannot be established, by a majority vote of the full
Board in which Directors who are Parties may participate; or
(iii) By the stockholders.
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(3) Authorization of indemnification and determination as to
reasonableness of Expenses shall be made in the same manner as the determination
that indemnification is permissible. However, if the determination that
indemnification is permissible is made by the special legal counsel,
authorization of indemnification and determination as to the unreasonableness of
Expenses shall be made in the manner specified in subparagraph (ii) of paragraph
(2) of this Section 5 for selection of such counsel.
(4) Shares held by Directors who are Parties to the Proceeding shall
not be voted on the subject matter under this Section 5.
Section 6. PAYMENT OF EXPENSES IN ADVANCE OF FINAL DISPOSITION OF
ACTION.
(1) Reasonable Expenses incurred by a Director who is a Party to a
Proceeding shall be paid or reimbursed by the Company in advance of the final
disposition of the Proceeding, upon receipt by the Company of:
(i) A written affirmation by the Director of the Director's good
faith belief that the standard of conduct necessary for indemnification by the
Company as authorized in this Agreement has been met; and
(ii) A written undertaking by or on behalf of the Director to
repay the amount if it shall ultimately be determined that the standard of
conduct has not been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this Section 6 shall be an unlimited general obligation of the Director but need
not be secured and may be accepted without reference to financial ability to
make the repayment.
Section 7. REIMBURSEMENT OF DIRECTOR'S EXPENSES INCURRED WHILE
APPEARING AS WITNESS. The Company shall pay or reimburse Expenses incurred by a
Director in connection with an appearance as a witness in a Proceeding at a time
when the Director has not been made a named defendant or respondent in the
Proceeding.
Section 8. DIRECTOR'S SERVICE TO EMPLOYEE BENEFIT PLAN. For purposes
of this Agreement:
(1) The Company shall be deemed to have requested a Director to serve
an employee benefit plan where the performance of the Director's duties to the
Company also imposes duties on, or otherwise involves services by, the Director
to the plan or participants or beneficiaries of the plan.
(2) Excise taxes assessed on a Director with respect to an employee
benefit plan pursuant to applicable law shall be deemed fines; and
(3) Action taken or omitted by the Director with respect to an
employee benefit plan in the performance of the Director's duties for a purpose
reasonably believed by the Director to be in the interest of the participants
and beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Company.
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Section 9. OFFICER, EMPLOYEE OR AGENT.
(1) The Company shall indemnify and advance Expenses to an officer,
employee, or agent of the Company to the same extent that it shall indemnify
Directors under this Agreement.
Section 10. NON-EXCLUSIVITY. The indemnification and advancement of
Expenses provided or authorized by this Agreement may not be deemed exclusive of
any other rights by indemnification or otherwise, to which a Director may be
entitled under the Charter, the Bylaws, a resolution of stockholders or
directors, an agreement or otherwise, both as to action in an Official Capacity
and as to action in another capacity while holding office.
Section 11. INSURANCE. The Company may purchase and maintain
insurance on behalf of any person who is or was a Director, officer, employee,
or agent of the Company, or who, while a Director, officer, employee, or agent
of the Company, is or was serving at the request of the Company as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise, or employee
benefit plan against any liability asserted against and incurred by such person
in any such capacity or arising out of such person's position, whether or not
the Company would have the power to indemnify against liability under the
provisions of this Agreement or under Maryland law in effect from time to time.
Section 12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Maryland applicable to
agreements to be made and to be performed entirely within such State.
Section 13. CAPTIONS. The captions assigned to provisions of this
Agreement are for convenience only and shall be disregarded in construing this
Agreement.
Section 14. NUMBER AND GENDER. Use of the singular in this Agreement
includes the plural, use of the plural includes the singular, and use of one
gender includes both genders, as the context may require.
Section 15. CROSS REFERENCES AND EXHIBITS. Any reference in this
Agreement to a "Section" or "paragraph" shall be construed, respectively, as
referring to a Section of this Agreement, or a paragraph of the Section of this
Agreement in which the reference appears.
Section 16. SUCCESSORS. This Agreement shall be binding upon and
inure to the benefit of the successors of the Company.
Section 17. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity of any other
provision, and all other provisions shall remain in full force and effect.
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Section 18. ENTIRE AGREEMENT. This Agreement, the Charter and the
Bylaws contain the entire agreement between the parties as to the rights granted
and the obligations assumed in this instrument. This Agreement may be amended
only by a subsequent written instrument signed by both parties.
Section 19. NON-ASSIGNABILITY. This Agreement may not be assigned by
either party hereto, and any purported assignment of this Agreement shall be
null and void.
Section 20. WAIVER. Any forbearance by a party to this Agreement in
exercising any right or remedy under this Agreement or otherwise afforded by
applicable law shall not be a waiver of or preclude the exercise of that or any
other right or remedy.
The parties hereto have entered into this Agreement effective as of
the date first above written.
COMPANY: INDEMNITEE:
ARDEN REALTY, INC.
a Maryland corporation ________________________________________
________________________________________
(Print Name)
By:_____________________________
Name:___________________________
Title:__________________________
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