EXHIBIT 10.1
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement") is
made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Indemnitee"). This
Agreement amends and restates in its entirety the Indemnification Agreement,
dated as of May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve corporations
as directors or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined that, in
order to attract and retain qualified individuals, the Company will attempt to
maintain on an ongoing basis, at its sole expense, liability insurance to
protect persons serving the Company and its subsidiaries from certain
liabilities. Although the furnishing of that insurance has been a customary and
widespread practice among United States-based corporations and other business
enterprises, the Board believes that, given current market conditions and
trends, that insurance may be available to it in the future only at higher
premiums and with more exclusions. At the same time, directors, officers and
other persons in service to corporations or business enterprises increasingly
are being subjected to expensive and time-consuming litigation relating to,
among other matters, matters that traditionally would have been brought only
against the corporation or business enterprise itself. The uncertainties
relating to liability insurance and to indemnification have increased the
difficulty of attracting and retaining those persons, and the Board has
determined that (i) this increased difficulty is detrimental to the best
interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of the
Company and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder.
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The Indemnitee does not regard the protection available under the Company's
Bylaws and insurance as adequate in the present circumstances, and may not be
willing to serve as an officer or director without adequate protection, and the
Company desires Indemnitee to serve in such capacity. Indemnitee is willing to
serve, continue to serve and to take on additional service for or on behalf of
the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants herein,
the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as a
director and/or officer of the Company and, as mutually agreed by Indemnitee and
the Company, as a director, officer, trustee, general partner, managing member,
employee, agent or fiduciary of other corporations, limited liability companies,
partnerships, joint ventures, trusts or other enterprises (including, without
limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee may at
any time and for any reason resign from any such position (subject to any other
contractual obligation or any obligation applicable law imposes), in which event
the Company will have no obligation under this Agreement to continue Indemnitee
in that position. This Agreement is not and is not to be construed as an
employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify, and
advance Expenses (as hereinafter defined) to, Indemnitee (i) as this Agreement
permits and (ii) (subject to the provisions hereof) to the fullest extent
applicable law in effect on the date hereof and as amended from time to time
permits. The rights the preceding sentence provide to Indemnitee will include,
but will not be limited to, the rights the other Sections hereof set forth.
Section 3. Proceedings Other Than by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 3
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant in any threatened, pending or completed
Proceeding (as hereinafter defined), other than a Proceeding by or in the right
of the Company. Pursuant to this Section 3, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses, judgments, penalties, fines (including excise taxes) and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of those Expenses, judgments, fines,
penalties or amounts paid in settlement) actually and reasonably incurred by him
or on his behalf in connection with that Proceeding or any claim, issue or
matter therein, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and,
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with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company. Indemnitee
will be entitled to the rights of indemnification this Section 4 provides if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
or a participant (as a witness or otherwise) in any threatened, pending or
completed Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses actually and reasonably incurred by him or on his behalf in
connection with that Proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, that no indemnification against those Expenses will
be made in respect of any claim, issue or matter in that Proceeding as to which
Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly or
Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness. Notwithstanding
any other provision hereof, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
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Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that Indemnitee
is entitled to indemnification hereunder, the Company will: (i) within 10 days
after that determination pay to Indemnitee all amounts theretofore incurred by
or on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination; and (ii) thereafter on written
request by Indemnitee, pay to Indemnitee within 10 days after that request such
additional amounts theretofore incurred by or on behalf of Indemnitee in respect
of which Indemnitee is entitled to that indemnification by reason of that
determination. Indemnitee will cooperate with the person, persons or entity
making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity on reasonable advance request any documentation or information
which is (i) not privileged or otherwise protected from disclosure, (ii)
reasonably available to Indemnitee and (iii) reasonably necessary to that
determination. The Company will bear all costs and expenses (including
attorneys' fees and disbursements) Indemnitee incurs in so cooperating
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
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to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a) In
making a determination with respect to entitlement to indemnification hereunder,
the person, persons or entity making that determination must presume that
Indemnitee is entitled to indemnification hereunder if Indemnitee has submitted
a request for indemnification in accordance with Section 8(a), and the Company
will have the burden of proof to overcome that presumption in connection with
the making by any person, persons or entity of any determination contrary to
that presumption. Neither the failure of the Company (including by its directors
or independent legal counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
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Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with any
employee benefit plan will, if taken or omitted in good faith by Indemnitee and
in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination of good
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faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser
or other expert selected by the Enterprise. The provisions of this Section 9(d)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of
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any other director, trustee, partner, managing member, fiduciary, officer, agent
or employee of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
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proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent permitted
by law against all Expenses and, if requested by Indemnitee, shall (within ten
(10) days after the Company's receipt of such written request) advance such
Expenses to Indemnitee, which are incurred by Indemnitee in connection with any
judicial proceeding or arbitration brought by Indemnitee for (i) indemnification
or advances of Expenses by the Company under this Agreement or any other
agreement or provision of the Company's Certificate of Incorporation or Bylaws
now or hereafter in effect or (ii) recovery or advances under any insurance
policy maintained by any person for the benefit of Indemnitee, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance or insurance recovery, as the case may be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under
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applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, employees, agents or fiduciaries of the Company or of any other
Enterprise that any such person serves at the request of the Company, Indemnitee
will be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer,
trustee, partner, managing member, employee, agent or fiduciary under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated to
the extent of that payment to all the rights of recovery of Indemnitee, who will
execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses hereunder to
Indemnitee with respect to Indemnitee's service at the request of the Company as
a director, officer, employee, agent or fiduciary of any other Enterprise will
be reduced by any amount Indemnitee has actually received as indemnification or
advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee,
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agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or sale
and purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act or similar provisions of state statutory law
or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof, prior to
a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
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as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person engaged
in business as an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own," any securities that Person acquires through its
participation in good faith in a firm commitment underwriting (including,
without limitation, securities acquired pursuant to stabilizing transactions to
facilitate a public offering in accordance with Exchange Act Regulation M or to
cover overallotments created in connection with a public offering) until the
expiration of 40 days after the date of that acquisition. For purposes of this
definition, "voting" a security includes voting, granting a proxy, acting by
consent, making a request or demand relating to corporate action (including,
without limitation, calling a stockholder meeting) or otherwise giving an
authorization (within the meaning of Section 14(a) of the Exchange Act) in
respect of that security.
"Change of Control" means the occurrence of any of the following events
that occurs after the IPO Closing Date: (i) any Person becomes an Acquiring
Person; (ii) at any time the then Continuing Directors cease to constitute a
majority of the members of the Board; (iii) a merger of the Company with or
into, or a sale by the Company of its properties and assets substantially as an
entirety to, another Person occurs and, immediately after that occurrence, any
Person, other than an Exempt Person, together with all Affiliates and Associates
of that Person (other than Exempt Persons), will be the Beneficial Owner of 15%
or more of the total voting power of the then outstanding Voting Shares of the
Person surviving that transaction (in the case or a merger or consolidation) or
the Person acquiring those properties and assets substantially as an entirety
unless that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding prior
to that transaction; (iv) the approval by the stockholders of the Company of a
complete liquidation of the Company or an agreement or series of agreements for
the sale or disposition by the Company of all or substantially all of the
Company's assets; or (v) occurs any other event of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or a response to any similar item on any similar schedule or form)
promulgated under the Exchange Act (as defined below), whether or not the
Company is then subject to such reporting requirement.
"Common Stock" means (i) the common stock, par value $.001 per share, of
the Company and (ii) any other class of capital stock of the Company which is
(A) except for less voting rights, identical to the common stock clause (i) of
this definition describes and (B) convertible into that common stock on a share
for share basis on the occurrence of a Change of Control.
-12-
"Continuing Director" means at any time any individual who then (i) is a
member of the Board and was a member of the Board as of the IPO Closing Date or
whose nomination for his first election, or that first election, to the Board
following that date was recommended or approved by a majority of the then
Continuing Directors (acting separately or as a part of any action taken by the
Board or any committee thereof) and (ii) is not an Acquiring Person, an
Affiliate or Associate of an Acquiring Person or a nominee or representative of
an Acquiring Person or of any such Affiliate or Associate.
"Corporate Status" describes the status of a natural person who is or was a
director, officer, trustee, general partner, managing member, employee or agent
of the Company or of any other Enterprise, provided that person is or was
serving in that capacity at the request of the Company. For purposes of this
Agreement, "serving at the request of the Company" includes any service by
Indemnitee which imposes duties on, or involves services by, Indemnitee with
respect to any employee benefit plan or its participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of Delaware.
"Disinterested Director" means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification is sought by
Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the Company,
any employee benefit plan of the Company or of any subsidiary of the Company and
(B) any Person organized, appointed or established by the Company for or
pursuant to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or any
subsidiary of the Company; and (ii) Indemnitee, any Affiliate or Associate of
Indemnitee or any group (as Exchange Act Rule 13d-5(b) uses that term) of which
Indemnitee or any Affiliate or Associate of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
all other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise participating
in, a Proceeding and all interest or finance charges attributable to any
thereof. Should any payments by the Company under this Agreement be determined
to be subject to any federal, state or local income or excise tax, "Expenses"
also will include such amounts as are necessary to place Indemnitee in the same
after-tax position (after giving effect to all applicable taxes) he would have
been in had no such tax been determined to apply to those payments. Expenses
also shall include Expenses incurred in connection with any appeal resulting
from any Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal bond or
its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm, that or
who is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company, its
affiliates or Indemnitee in any matter material to any such party; or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel" does
not include at any time any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement.
"IPO" means the first time a registration statement the Company has filed
under the Securities Act of 1933, as amended, and respecting an underwritten
primary offering by the Company of shares of Common Stock becomes effective
under that Act and the Company issues and sells any of the shares registered by
that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or employee
organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which Indemnitee was, is or
will be involved as a party or otherwise by reason of the fact that Indemnitee
is or was a director or officer of the Company, by reason of any action taken by
him or of any action on his part while acting as director or officer of the
Company, or by reason of the fact that he is or was serving at the request of
the Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether or
not serving in such capacity at the time any liability or expense is incurred
for which indemnification, reimbursement, or advancement of expenses can be
provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of that
corporation of the class or classes having general voting power under ordinary
circumstances to elect a majority of that corporation's board of directors; and
(ii) in the case of any other entity, equity interests of the class or classes
having general voting power under ordinary circumstances equivalent to the
Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or modification
or amendment of this Agreement will be binding unless executed in writing by
both parties hereto. No waiver of any of the provisions of this Agreement will
be deemed or will constitute a waiver of any other provisions hereof (whether or
not similar), nor will any such waiver constitute a continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This Agreement
and the legal relations among the parties will be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration Indemnitee
commences pursuant to Section 10(a), the Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding arising
out of or in connection with this Agreement will be brought only in the Court of
Chancery and not in any other state or federal court in the United States of
America or any court in any other country, (ii) consent to submit to the
exclusive jurisdiction of the Court of Chancery for purposes of any action or
proceeding arising out of or in connection with this Agreement, (iii) waive any
objection to the laying of venue of any such action or proceeding in the Court
of Chancery and (iv) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Court of Chancery has been brought
in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- ---------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------
President and Chief Executive Officer
ATTEST: INDEMNITEE:
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------- -------------------------------------
Print Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Indemnitee"). This Agreement
amends and restates in its entirety the Indemnification Agreement, dated as of
May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as
a director and/or officer of the Company and, as mutually agreed by Indemnitee
and the Company, as a director, officer, trustee, general partner, managing
member, employee, agent or fiduciary of other corporations, limited liability
companies, partnerships, joint ventures, trusts or other enterprises (including,
without limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee
may at any time and for any reason resign from any such position (subject to any
other contractual obligation or any obligation applicable law imposes), in which
event the Company will have no obligation under this Agreement to continue
Indemnitee in that position. This Agreement is not and is not to be construed
as an employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses, judgments, penalties, fines (including excise taxes)
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of those Expenses,
judgments, fines, penalties or amounts paid in settlement) actually and
reasonably incurred by him or on his behalf in connection with that Proceeding
or any claim, issue or matter therein, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that Indemnitee
is entitled to indemnification hereunder, the Company will: (i) within 10 days
after that determination pay to Indemnitee all amounts theretofore incurred by
or on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination; and (ii) thereafter on written
request by Indemnitee, pay to Indemnitee within 10 days after that request such
additional amounts theretofore incurred by or on behalf of Indemnitee in respect
of which Indemnitee is entitled to that indemnification by reason of that
determination. Indemnitee will cooperate with the person, persons or entity
making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity on reasonable advance request any documentation or information
which is (i) not privileged or otherwise protected from disclosure, (ii)
reasonably available to Indemnitee and (iii) reasonably necessary to that
determination. The Company will bear all costs and expenses (including
attorneys' fees and disbursements) Indemnitee incurs in so cooperating
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or on a plea of
nolo contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination
-----------------------
of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies
providing liability insurance for directors, officers, trustees, partners,
managing members, employees, agents or fiduciaries of the Company or of any
other Enterprise that any such person serves at the request of the Company,
Indemnitee will be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
director, officer, trustee, partner, managing member, employee, agent or
fiduciary under such policy or policies. If, at the time the Company receives
notice from any source of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of such
Proceeding to the insurers in accordance with the procedures set forth in the
respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof,
prior to a Change in Control, in connection with any Proceeding (or any part of
any Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
-9-
as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is a
member of the Board and was a member of the Board as of the IPO Closing Date or
whose nomination for his first election, or that first election, to the Board
following that date was recommended or approved by a majority of the then
Continuing Directors (acting separately or as a part of any action taken by the
Board or any committee thereof) and (ii) is not an Acquiring Person, an
Affiliate or Associate of an Acquiring Person or a nominee or representative of
an Acquiring Person or of any such Affiliate or Associate.
"Corporate Status" describes the status of a natural person who is or was a
director, officer, trustee, general partner, managing member, employee or agent
of the Company or of any other Enterprise, provided that person is or was
serving in that capacity at the request of the Company. For purposes of this
Agreement, "serving at the request of the Company" includes any service by
Indemnitee which imposes duties on, or involves services by, Indemnitee with
respect to any employee benefit plan or its participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of Delaware.
"Disinterested Director" means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification is sought by
Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the Company,
any employee benefit plan of the Company or of any subsidiary of the Company and
(B) any Person organized, appointed or established by the Company for or
pursuant to the terms of any such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of the Company or any
subsidiary of the Company; and (ii) Indemnitee, any Affiliate or Associate of
Indemnitee or any group (as Exchange Act Rule 13d-5(b) uses that term) of which
Indemnitee or any Affiliate or Associate of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
all other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise participating
in, a Proceeding and all interest or finance charges attributable to any
thereof. Should any payments by the Company under this Agreement be determined
to be subject to any federal, state or local income or excise tax, "Expenses"
also will include such amounts as are necessary to place Indemnitee in the same
after-tax position (after giving effect to all applicable taxes) he would have
been in had no such tax been determined to apply to those payments. Expenses
also shall include Expenses incurred in connection with any appeal resulting
from any Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal bond or
its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm, that or
who is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company, its
affiliates or Indemnitee in any matter material to any such party; or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel" does
not include at any time any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement.
"IPO" means the first time a registration statement the Company has filed
under the Securities Act of 1933, as amended, and respecting an underwritten
primary offering by the Company of shares of Common Stock becomes effective
under that Act and the Company issues and sells any of the shares registered by
that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or employee
organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which Indemnitee was, is or
will be involved as a party or otherwise by reason of the fact that Indemnitee
is or was a director or officer of the Company, by reason of any action taken by
him or of any action on his part while acting as director or officer of the
Company, or by reason of the fact that he is or was serving at the request of
the Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether or
not serving in such capacity at the time any liability or expense is incurred
for which indemnification, reimbursement, or advancement of expenses can be
provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of that
corporation of the class or classes having general voting power under ordinary
circumstances to elect a majority of that corporation's board of directors; and
(ii) in the case of any other entity, equity interests of the class or classes
having general voting power under ordinary circumstances equivalent to the
Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or modification
or amendment of this Agreement will be binding unless executed in writing by
both parties hereto. No waiver of any of the provisions of this Agreement will
be deemed or will constitute a waiver of any other provisions hereof (whether or
not similar), nor will any such waiver constitute a continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to notify
the Company in writing on being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
hereunder; provided, however, a failure to give that notice will not deprive
Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This Agreement
and the legal relations among the parties will be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration Indemnitee
commences pursuant to Section 10(a), the Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding arising
out of or in connection with this Agreement will be brought only in the Court of
Chancery and not in any other state or federal court in the United States of
America or any court in any other country, (ii) consent to submit to the
exclusive jurisdiction of the Court of Chancery for purposes of any action or
proceeding arising out of or in connection with this Agreement, (iii) waive any
objection to the laying of venue of any such action or proceeding in the Court
of Chancery and (iv) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Court of Chancery has been brought
in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage of
each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- ------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------- President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Indemnitee"). This Agreement
amends and restates in its entirety the Indemnification Agreement, dated as of
May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as
a director and/or officer of the Company and, as mutually agreed by Indemnitee
and the Company, as a director, officer, trustee, general partner, managing
member, employee, agent or fiduciary of other corporations, limited liability
companies, partnerships, joint ventures, trusts or other enterprises (including,
without limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee
may at any time and for any reason resign from any such position (subject to any
other contractual obligation or any obligation applicable law imposes), in which
event the Company will have no obligation under this Agreement to continue
Indemnitee in that position. This Agreement is not and is not to be construed
as an employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses, judgments, penalties, fines (including excise taxes)
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of those Expenses,
judgments, fines, penalties or amounts paid in settlement) actually and
reasonably incurred by him or on his behalf in connection with that Proceeding
or any claim, issue or matter therein, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that Indemnitee
is entitled to indemnification hereunder, the Company will: (i) within 10 days
after that determination pay to Indemnitee all amounts theretofore incurred by
or on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination; and (ii) thereafter on written
request by Indemnitee, pay to Indemnitee within 10 days after that request such
additional amounts theretofore incurred by or on behalf of Indemnitee in respect
of which Indemnitee is entitled to that indemnification by reason of that
determination. Indemnitee will cooperate with the person, persons or entity
making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity on reasonable advance request any documentation or information
which is (i) not privileged or otherwise protected from disclosure, (ii)
reasonably available to Indemnitee and (iii) reasonably necessary to that
determination. The Company will bear all costs and expenses (including
attorneys' fees and disbursements) Indemnitee incurs in so cooperating
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination
-----------------------
of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, employees, agents or fiduciaries of the Company or of any other
Enterprise that any such person serves at the request of the Company, Indemnitee
will be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer,
trustee, partner, managing member, employee, agent or fiduciary under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that Indemnitee
has ceased to serve as a director or officer of the Company or as a director,
officer, trustee, partner, managing par tner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof, prior
to a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
-9-
as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- ----------------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------- President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------- --------------------------------------------
Print Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Indemnitee"). This
Agreement amends and restates in its entirety the Indemnification Agreement,
dated as of May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as a
director and/or officer of the Company and, as mutually agreed by Indemnitee and
the Company, as a director, officer, trustee, general partner, managing member,
employee, agent or fiduciary of other corporations, limited liability companies,
partnerships, joint ventures, trusts or other enterprises (including, without
limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee may at
any time and for any reason resign from any such position (subject to any other
contractual obligation or any obligation applicable law imposes), in which event
the Company will have no obligation under this Agreement to continue Indemnitee
in that position. This Agreement is not and is not to be construed as an
employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses, judgments, penalties, fines (including excise taxes) and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of those Expenses, judgments, fines,
penalties or amounts paid in settlement) actually and reasonably incurred by him
or on his behalf in connection with that Proceeding or any claim, issue or
matter therein, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant
to Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that Indemnitee
is entitled to indemnification hereunder, the Company will: (i) within 10 days
after that determination pay to Indemnitee all amounts theretofore incurred by
or on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination; and (ii) thereafter on written
request by Indemnitee, pay to Indemnitee within 10 days after that request such
additional amounts theretofore incurred by or on behalf of Indemnitee in respect
of which Indemnitee is entitled to that indemnification by reason of that
determination. Indemnitee will cooperate with the person, persons or entity
making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity on reasonable advance request any documentation or information
which is (i) not privileged or otherwise protected from disclosure, (ii)
reasonably available to Indemnitee and (iii) reasonably necessary to that
determination. The Company will bear all costs and expenses (including
attorneys' fees and disbursements) Indemnitee incurs in so cooperating
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination of
______ -----------------------
good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses this
Agreement provides are not and will not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies
providing liability insurance for directors, officers, trustees, partners,
managing members, employees, agents or fiduciaries of the Company or of any
other Enterprise that any such person serves at the request of the Company,
Indemnitee will be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
director, officer, trustee, partner, managing member, employee, agent or
fiduciary under such policy or policies. If, at the time the Company receives
notice from any source of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of such
Proceeding to the insurers in accordance with the procedures set forth in the
respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof,
prior to a Change in Control, in connection with any Proceeding (or any part of
any Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
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as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange Act
Regulation M or to cover overallotments created in connection with a public
offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that common
stock on a share for share basis on the occurrence of a Change of Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member, employee
or agent of the Company or of any other Enterprise, provided that person is
or was serving in that capacity at the request of the Company. For purposes
of this Agreement, "serving at the request of the Company" includes any
service by Indemnitee which imposes duties on, or involves services by,
Indemnitee with respect to any employee benefit plan or its participants or
beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule 13d-
5(b) uses that term) of which Indemnitee or any Affiliate or Associate of
Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in,
or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as are
necessary to place Indemnitee in the same after-tax position (after giving
effect to all applicable taxes) he would have been in had no such tax been
determined to apply to those payments. Expenses also shall include Expenses
incurred in connection with any appeal resulting from any Proceeding,
including without limitation the premium, security for, and other costs
relating to any cost bond, supersedeas bond, or other appeal bond or its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder. Notwithstanding the foregoing, the term
"Independent Counsel" does not include at any time any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee's rights under this Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of the
shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought in the right of the Company or otherwise and
whether of a civil, criminal, administrative or investigative nature, in
which Indemnitee was, is or will be involved as a party or otherwise by
reason of the fact that Indemnitee is or was a director or officer of the
Company, by reason of any action taken by him or of any action on his part
while acting as director or officer of the Company, or by reason of the fact
that he is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or
agent of any other Enterprise, in each case whether or not serving in such
capacity at the time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses can be provided
under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of the
class or classes having general voting power under ordinary circumstances
equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or modification
or amendment of this Agreement will be binding unless executed in writing by
both parties hereto. No waiver of any of the provisions of this Agreement will
be deemed or will constitute a waiver of any other provisions hereof (whether or
not similar), nor will any such waiver constitute a continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This Agreement
and the legal relations among the parties will be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration Indemnitee
commences pursuant to Section 10(a), the Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding arising
out of or in connection with this Agreement will be brought only in the Court of
Chancery and not in any other state or federal court in the United States of
America or any court in any other country, (ii) consent to submit to the
exclusive jurisdiction of the Court of Chancery for purposes of any action or
proceeding arising out of or in connection with this Agreement, (iii) waive any
objection to the laying of venue of any such action or proceeding in the Court
of Chancery and (iv) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Court of Chancery has been brought
in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------ -------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------- President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ -----------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Indemnitee"). This
Agreement amends and restates in its entirety the Indemnification Agreement,
dated as of May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as a
director and/or officer of the Company and, as mutually agreed by Indemnitee and
the Company, as a director, officer, trustee, general partner, managing member,
employee, agent or fiduciary of other corporations, limited liability companies,
partnerships, joint ventures, trusts or other enterprises (including, without
limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee may at
any time and for any reason resign from any such position (subject to any other
contractual obligation or any obligation applicable law imposes), in which event
the Company will have no obligation under this Agreement to continue Indemnitee
in that position. This Agreement is not and is not to be construed as an
employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify, and
advance Expenses (as hereinafter defined) to, Indemnitee (i) as this Agreement
permits and (ii) (subject to the provisions hereof) to the fullest extent
applicable law in effect on the date hereof and as amended from time to time
permits. The rights the preceding sentence provide to Indemnitee will include,
but will not be limited to, the rights the other Sections hereof set forth.
Section 3. Proceedings Other Than by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 3
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant in any threatened, pending or completed
Proceeding (as hereinafter defined), other than a Proceeding by or in the right
of the Company. Pursuant to this Section 3, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses, judgments, penalties, fines (including excise taxes) and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of those Expenses, judgments, fines,
penalties or amounts paid in settlement) actually and reasonably incurred by him
or on his behalf in connection with that Proceeding or any claim, issue or
matter therein, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company. Indemnitee
will be entitled to the rights of indemnification this Section 4 provides if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
or a participant (as a witness or otherwise) in any threatened, pending or
completed Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses actually and reasonably incurred by him or on his behalf in
connection with that Proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, that no indemnification against those Expenses will
be made in respect of any claim, issue or matter in that Proceeding as to which
Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly or
Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that Indemnitee
is entitled to indemnification hereunder, the Company will: (i) within 10 days
after that determination pay to Indemnitee all amounts theretofore incurred by
or on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination; and (ii) thereafter on written
request by Indemnitee, pay to Indemnitee within 10 days after that request such
additional amounts theretofore incurred by or on behalf of Indemnitee in respect
of which Indemnitee is entitled to that indemnification by reason of that
determination. Indemnitee will cooperate with the person, persons or entity
making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity on reasonable advance request any documentation or information
which is (i) not privileged or otherwise protected from disclosure, (ii)
reasonably available to Indemnitee and (iii) reasonably necessary to that
determination. The Company will bear all costs and expenses (including
attorneys' fees and disbursements) Indemnitee incurs in so cooperating
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a) In
making a determination with respect to entitlement to indemnification hereunder,
the person, persons or entity making that determination must presume that
Indemnitee is entitled to indemnification hereunder if Indemnitee has submitted
a request for indemnification in accordance with Section 8(a), and the Company
will have the burden of proof to overcome that presumption in connection with
the making by any person, persons or entity of any determination contrary to
that presumption. Neither the failure of the Company (including by its directors
or independent legal counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination of good
-----------------------
faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser
or other expert selected by the Enterprise. The provisions of this Section 9(d)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses this
Agreement provides are not and will not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, employees, agents or fiduciaries of the Company or of any other
Enterprise that any such person serves at the request of the Company, Indemnitee
will be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer,
trustee, partner, managing member, employee, agent or fiduciary under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue until
and terminate on the later of: (i) 10 years after the date that Indemnitee has
ceased to serve as a director or officer of the Company or as a director,
officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof, prior
to a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
-9-
as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed in
one or more counterparts, each of which will for all purposes be deemed to be an
original but all of which together will constitute one and the same agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding, but does not include any
Exempt Person; provided, however, that a Person will not be or become an
Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person, together
with all its Affiliates and Associates, is not then the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and until
that Person, together with all Affiliates and Associates thereof, purchases
or otherwise becomes the Beneficial Owner of additional shares of Common
Stock constituting 1% or more of the then outstanding shares of Common Stock
or any other Person (or Persons) who is (or collectively are) the Beneficial
Owner of shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock becomes an Affiliate or Associate of that
Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------- --------------------------
Print Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- ------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Indemnitee"). This
Agreement amends and restates in its entirety the Indemnification Agreement,
dated as of May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as
a director and/or officer of the Company and, as mutually agreed by Indemnitee
and the Company, as a director, officer, trustee, general partner, managing
member, employee, agent or fiduciary of other corporations, limited liability
companies, partnerships, joint ventures, trusts or other enterprises (including,
without limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee
may at any time and for any reason resign from any such position (subject to any
other contractual obligation or any obligation applicable law imposes), in which
event the Company will have no obligation under this Agreement to continue
Indemnitee in that position. This Agreement is not and is not to be construed
as an employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses, judgments, penalties, fines (including excise taxes)
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of those Expenses,
judgments, fines, penalties or amounts paid in settlement) actually and
reasonably incurred by him or on his behalf in connection with that Proceeding
or any claim, issue or matter therein, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that
Indemnitee is entitled to indemnification hereunder, the Company will: (i)
within 10 days after that determination pay to Indemnitee all amounts
theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination;
and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within
10 days after that request such additional amounts theretofore incurred by or on
behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination. Indemnitee will cooperate with
the person, persons or entity making the determination with respect to
Indemnitee's entitlement to indemnification under this Agreement, including
providing to such person, persons or entity on reasonable advance request any
documentation or information which is (i) not privileged or otherwise protected
from disclosure, (ii) reasonably available to Indemnitee and (iii) reasonably
necessary to that determination. The Company will bear all costs and expenses
(including attorneys' fees and disbursements) Indemnitee incurs in so
cooperating (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination of good
-----------------------
faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser
or other expert selected by the Enterprise. The provisions of this Section 9(d)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, employees, agents or fiduciaries of the Company or of any other
Enterprise that any such person serves at the request of the Company, Indemnitee
will be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer,
trustee, partner, managing member, employee, agent or fiduciary under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof, prior
to a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
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as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------- Senior Vice President
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------ ----------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Indemnitee"). This
Agreement amends and restates in its entirety the Indemnification Agreement,
dated as of May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as
a director and/or officer of the Company and, as mutually agreed by Indemnitee
and the Company, as a director, officer, trustee, general partner, managing
member, employee, agent or fiduciary of other corporations, limited liability
companies, partnerships, joint ventures, trusts or other enterprises (including,
without limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee
may at any time and for any reason resign from any such position (subject to any
other contractual obligation or any obligation applicable law imposes), in which
event the Company will have no obligation under this Agreement to continue
Indemnitee in that position. This Agreement is not and is not to be construed as
an employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses, judgments, penalties, fines (including excise taxes) and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of those Expenses, judgments, fines,
penalties or amounts paid in settlement) actually and reasonably incurred by him
or on his behalf in connection with that Proceeding or any claim, issue or
matter therein, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that Indemnitee
is entitled to indemnification hereunder, the Company will: (i) within 10 days
after that determination pay to Indemnitee all amounts theretofore incurred by
or on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination; and (ii) thereafter on written
request by Indemnitee, pay to Indemnitee within 10 days after that request such
additional amounts theretofore incurred by or on behalf of Indemnitee in respect
of which Indemnitee is entitled to that indemnification by reason of that
determination. Indemnitee will cooperate with the person, persons or entity
making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity on reasonable advance request any documentation or information
which is (i) not privileged or otherwise protected from disclosure, (ii)
reasonably available to Indemnitee and (iii) reasonably necessary to that
determination. The Company will bear all costs and expenses (including
attorneys' fees and disbursements) Indemnitee incurs in so cooperating
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or on a plea of
nolo contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination of
-----------------------
good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses this
Agreement provides are not and will not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies
providing liability insurance for directors, officers, trustees, partners,
managing members, employees, agents or fiduciaries of the Company or of any
other Enterprise that any such person serves at the request of the Company,
Indemnitee will be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
director, officer, trustee, partner, managing member, employee, agent or
fiduciary under such policy or policies. If, at the time the Company receives
notice from any source of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of such
Proceeding to the insurers in accordance with the procedures set forth in the
respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that Indemnitee
has ceased to serve as a director or officer of the Company or as a director,
officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof,
prior to a Change in Control, in connection with any Proceeding (or any part of
any Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
-9-
as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall include
Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------- --------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------- President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------- -------------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Indemnitee"). This
Agreement amends and restates in its entirety the Indemnification Agreement,
dated as of May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as a
director and/or officer of the Company and, as mutually agreed by Indemnitee and
the Company, as a director, officer, trustee, general partner, managing member,
employee, agent or fiduciary of other corporations, limited liability companies,
partnerships, joint ventures, trusts or other enterprises (including, without
limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee may at
any time and for any reason resign from any such position (subject to any other
contractual obligation or any obligation applicable law imposes), in which event
the Company will have no obligation under this Agreement to continue Indemnitee
in that position. This Agreement is not and is not to be construed as an
employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses, judgments, penalties, fines (including excise taxes) and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of those Expenses, judgments, fines,
penalties or amounts paid in settlement) actually and reasonably incurred by him
or on his behalf in connection with that Proceeding or any claim, issue or
matter therein, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that Indemnitee
is entitled to indemnification hereunder, the Company will: (i) within 10 days
after that determination pay to Indemnitee all amounts theretofore incurred by
or on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination; and (ii) thereafter on written
request by Indemnitee, pay to Indemnitee within 10 days after that request such
additional amounts theretofore incurred by or on behalf of Indemnitee in respect
of which Indemnitee is entitled to that indemnification by reason of that
determination. Indemnitee will cooperate with the person, persons or entity
making the determination with respect to Indemnitee's entitlement to
indemnification under this Agreement, including providing to such person,
persons or entity on reasonable advance request any documentation or information
which is (i) not privileged or otherwise protected from disclosure, (ii)
reasonably available to Indemnitee and (iii) reasonably necessary to that
determination. The Company will bear all costs and expenses (including
attorneys' fees and disbursements) Indemnitee incurs in so cooperating
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a) In
making a determination with respect to entitlement to indemnification hereunder,
the person, persons or entity making that determination must presume that
Indemnitee is entitled to indemnification hereunder if Indemnitee has submitted
a request for indemnification in accordance with Section 8(a), and the Company
will have the burden of proof to overcome that presumption in connection with
the making by any person, persons or entity of any determination contrary to
that presumption. Neither the failure of the Company (including by its directors
or independent legal counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or on a plea of
nolo contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination of
------- -------------------------
good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses this
Agreement provides are not and will not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies
providing liability insurance for directors, officers, trustees, partners,
managing members, employees, agents or fiduciaries of the Company or of any
other Enterprise that any such person serves at the request of the Company,
Indemnitee will be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
director, officer, trustee, partner, managing member, employee, agent or
fiduciary under such policy or policies. If, at the time the Company receives
notice from any source of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of such
Proceeding to the insurers in accordance with the procedures set forth in the
respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that Indemnitee
has ceased to serve as a director or officer of the Company or as a director,
officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf
of Indemnitee under any insurance policy or other indemnity provision, except
with respect to any excess beyond the amount actually received under any
insurance policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale
(or sale and purchase) by Indemnitee of securities of the Company within the
meaning of Section 16(b) of the Exchange Act or similar provisions of state
statutory law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof,
prior to a Change in Control, in connection with any Proceeding (or any part of
any Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
-9-
as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
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Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ -----------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Indemnitee"). This Agreement
amends and restates in its entirety the Indemnification Agreement, dated as of
May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
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The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as a
director and/or officer of the Company and, as mutually agreed by Indemnitee and
the Company, as a director, officer, trustee, general partner, managing member,
employee, agent or fiduciary of other corporations, limited liability companies,
partnerships, joint ventures, trusts or other enterprises (including, without
limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee may at
any time and for any reason resign from any such position (subject to any other
contractual obligation or any obligation applicable law imposes), in which event
the Company will have no obligation under this Agreement to continue Indemnitee
in that position. This Agreement is not and is not to be construed as an
employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses, judgments, penalties, fines (including excise taxes) and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of those Expenses, judgments, fines,
penalties or amounts paid in settlement) actually and reasonably incurred by him
or on his behalf in connection with that Proceeding or any claim, issue or
matter therein, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that
Indemnitee is entitled to indemnification hereunder, the Company will: (i)
within 10 days after that determination pay to Indemnitee all amounts
theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination;
and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within
10 days after that request such additional amounts theretofore incurred by or on
behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination. Indemnitee will cooperate with
the person, persons or entity making the determination with respect to
Indemnitee's entitlement to indemnification under this Agreement, including
providing to such person, persons or entity on reasonable advance request any
documentation or information which is (i) not privileged or otherwise protected
from disclosure, (ii) reasonably available to Indemnitee and (iii) reasonably
necessary to that determination. The Company will bear all costs and expenses
(including attorneys' fees and disbursements) Indemnitee incurs in so
cooperating (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or on a plea of
nolo contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination
--- -----------------------
of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies
providing liability insurance for directors, officers, trustees, partners,
managing members, employees, agents or fiduciaries of the Company or of any
other Enterprise that any such person serves at the request of the Company,
Indemnitee will be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such
director, officer, trustee, partner, managing member, employee, agent or
fiduciary under such policy or policies. If, at the time the Company receives
notice from any source of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of such
Proceeding to the insurers in accordance with the procedures set forth in the
respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof,
prior to a Change in Control, in connection with any Proceeding (or any part of
any Proceeding) initiated by Indemnitee, including any Proceeding (or any part
of any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
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as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
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unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
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(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
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equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- -------------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------
President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------- -------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Indemnitee"). This
Agreement amends and restates in its entirety the Indemnification Agreement,
dated as of May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as
a director and/or officer of the Company and, as mutually agreed by Indemnitee
and the Company, as a director, officer, trustee, general partner, managing
member, employee, agent or fiduciary of other corporations, limited liability
companies, partnerships, joint ventures, trusts or other enterprises (including,
without limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee
may at any time and for any reason resign from any such position (subject to any
other contractual obligation or any obligation applicable law imposes), in which
event the Company will have no obligation under this Agreement to continue
Indemnitee in that position. This Agreement is not and is not to be construed
as an employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses, judgments, penalties, fines (including excise taxes)
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of those Expenses,
judgments, fines, penalties or amounts paid in settlement) actually and
reasonably incurred by him or on his behalf in connection with that Proceeding
or any claim, issue or matter therein, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that
Indemnitee is entitled to indemnification hereunder, the Company will: (i)
within 10 days after that determination pay to Indemnitee all amounts
theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination;
and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within
10 days after that request such additional amounts theretofore incurred by or on
behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination. Indemnitee will cooperate with
the person, persons or entity making the determination with respect to
Indemnitee's entitlement to indemnification under this Agreement, including
providing to such person, persons or entity on reasonable advance request any
documentation or information which is (i) not privileged or otherwise protected
from disclosure, (ii) reasonably available to Indemnitee and (iii) reasonably
necessary to that determination. The Company will bear all costs and expenses
(including attorneys' fees and disbursements) Indemnitee incurs in so
cooperating (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination
-----------------------
of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, employees, agents or fiduciaries of the Company or of any other
Enterprise that any such person serves at the request of the Company, Indemnitee
will be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer,
trustee, partner, managing member, employee, agent or fiduciary under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof, prior
to a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
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as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
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"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
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equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
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Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------ -------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ -----------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ ("Indemnitee"). This Agreement
amends and restates in its entirety the Indemnification Agreement, dated as of
May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
-1-
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as
a director and/or officer of the Company and, as mutually agreed by Indemnitee
and the Company, as a director, officer, trustee, general partner, managing
member, employee, agent or fiduciary of other corporations, limited liability
companies, partnerships, joint ventures, trusts or other enterprises (including,
without limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee
may at any time and for any reason resign from any such position (subject to any
other contractual obligation or any obligation applicable law imposes), in which
event the Company will have no obligation under this Agreement to continue
Indemnitee in that position. This Agreement is not and is not to be construed
as an employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses, judgments, penalties, fines (including excise taxes)
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of those Expenses,
judgments, fines, penalties or amounts paid in settlement) actually and
reasonably incurred by him or on his behalf in connection with that Proceeding
or any claim, issue or matter therein, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and,
-2-
with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
-3-
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that
Indemnitee is entitled to indemnification hereunder, the Company will: (i)
within 10 days after that determination pay to Indemnitee all amounts
theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination;
and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within
10 days after that request such additional amounts theretofore incurred by or on
behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination. Indemnitee will cooperate with
the person, persons or entity making the determination with respect to
Indemnitee's entitlement to indemnification under this Agreement, including
providing to such person, persons or entity on reasonable advance request any
documentation or information which is (i) not privileged or otherwise protected
from disclosure, (ii) reasonably available to Indemnitee and (iii) reasonably
necessary to that determination. The Company will bear all costs and expenses
(including attorneys' fees and disbursements) Indemnitee incurs in so
cooperating (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
-4-
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
-5-
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed to have been taken or
omitted in a manner "not opposed to the best interests of the Company" for all
purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination
-----------------------
of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under
-7-
applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, employees, agents or fiduciaries of the Company or of any other
Enterprise that any such person serves at the request of the Company, Indemnitee
will be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer,
trustee, partner, managing member, employee, agent or fiduciary under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee,
-8-
agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof, prior
to a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
-9-
as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- -------------------------------------
Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------
President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Indemnitee"). This
Agreement amends and restates in its entirety the Indemnification Agreement,
dated as of May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
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The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer or director without adequate protection,
and the Company desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on
behalf of the Company on the condition that he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as
a director and/or officer of the Company and, as mutually agreed by Indemnitee
and the Company, as a director, officer, trustee, general partner, managing
member, employee, agent or fiduciary of other corporations, limited liability
companies, partnerships, joint ventures, trusts or other enterprises (including,
without limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee
may at any time and for any reason resign from any such position (subject to any
other contractual obligation or any obligation applicable law imposes), in which
event the Company will have no obligation under this Agreement to continue
Indemnitee in that position. This Agreement is not and is not to be construed
as an employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (i) as this
Agreement permits and (ii) (subject to the provisions hereof) to the fullest
extent applicable law in effect on the date hereof and as amended from time to
time permits. The rights the preceding sentence provide to Indemnitee will
include, but will not be limited to, the rights the other Sections hereof set
forth.
Section 3. Proceedings Other Than by or in the Right of the
Company. Indemnitee will be entitled to the rights of indemnification this
Section 3 provides if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or a participant in any threatened, pending or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses, judgments, penalties, fines (including excise taxes)
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of those Expenses,
judgments, fines, penalties or amounts paid in settlement) actually and
reasonably incurred by him or on his behalf in connection with that Proceeding
or any claim, issue or matter therein, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company and,
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with respect to any criminal Proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 4. Proceedings by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 4
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant (as a witness or otherwise) in any threatened,
pending or completed Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 4, the Company will
indemnify Indemnitee against, and will hold Indemnitee harmless from and in
respect of, all Expenses actually and reasonably incurred by him or on his
behalf in connection with that Proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, that no indemnification against those Expenses
will be made in respect of any claim, issue or matter in that Proceeding as to
which Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly
or Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness.
Notwithstanding any other provision hereof, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding to which Indemnitee
is not a party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
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Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company a
written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that
Indemnitee is entitled to indemnification hereunder, the Company will: (i)
within 10 days after that determination pay to Indemnitee all amounts
theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination;
and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within
10 days after that request such additional amounts theretofore incurred by or on
behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination. Indemnitee will cooperate with
the person, persons or entity making the determination with respect to
Indemnitee's entitlement to indemnification under this Agreement, including
providing to such person, persons or entity on reasonable advance request any
documentation or information which is (i) not privileged or otherwise protected
from disclosure, (ii) reasonably available to Indemnitee and (iii) reasonably
necessary to that determination. The Company will bear all costs and expenses
(including attorneys' fees and disbursements) Indemnitee incurs in so
cooperating (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or
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to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an "Independent Counsel" as
Section 17 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If any such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until that objection is
withdrawn or a court of competent jurisdiction has determined that objection is
without merit. If (i) an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c) and (ii) within 20 days
after submission by Indemnitee of a written request for indemnification pursuant
to Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a)
In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making that determination must presume
that Indemnitee is entitled to indemnification hereunder if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a), and the
Company will have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary
to that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the
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Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection
with any employee benefit plan will, if taken or omitted in good faith by
Indemnitee and in a manner Indemnitee reasonably believed to be in the interest
of the participants in or beneficiaries of that plan, be deemed to have been
taken or omitted in a manner "not opposed to the best interests of the Company"
for all purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination
-----------------------
of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure
-----------------
to act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
-6-
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made with respect
to Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under
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applicable law, the Company's Certificate of Incorporation, the Company's
Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or termination of this Agreement or any
provision hereof will limit or restrict any right of Indemnitee hereunder in
respect of any action Indemnitee has taken or omitted in his Corporate Status
prior to that amendment, alteration or termination. To the extent that a change
in Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, employees, agents or fiduciaries of the Company or of any other
Enterprise that any such person serves at the request of the Company, Indemnitee
will be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer,
trustee, partner, managing member, employee, agent or fiduciary under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee,
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agent or fiduciary of any other Enterprise that Indemnitee served on behalf of
the Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof, prior
to a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve
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as a director or officer of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director or officer of
the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person
-10-
unless, in either such case, that Person, together with all Affiliates and
Associates of that Person, is not then the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
-11-
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
-12-
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its
-13-
equivalent. Expenses, however, shall not include amounts paid in settlement
by Indemnitee or the amount of judgments or fines against Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the Company of shares of Common Stock
becomes effective under that Act and the Company issues and sells any of
the shares registered by that registration statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
-14-
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party to whom the
notice or communication is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day in the city
in which the Company's principal executive office is located next following the
day when placed in the mail, postage prepaid, certified or registered, addressed
to the appropriate party at the address of that party set forth below (or at
such other address as that party may designate by written notice to the other
party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that
-15-
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar import to refer to this Agreement as a whole and
not to any provision of this Agreement, and the word "Section" refers to a
Section of this Agreement, unless otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------- -----------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
-16-
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (this "Agreement")
is made as of August 17, 2000 by and between U.S. Concrete, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇ ("Indemnitee"). This Agreement
amends and restates in its entirety the Indemnification Agreement, dated as of
May 28, 1999, between the Company and Indemnitee.
PRELIMINARY STATEMENT
Highly competent persons have become more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of corporations.
The Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
increasingly are being subjected to expensive and time-consuming litigation
relating to, among other matters, matters that traditionally would have been
brought only against the corporation or business enterprise itself. The
uncertainties relating to liability insurance and to indemnification have
increased the difficulty of attracting and retaining those persons, and the
Board has determined that (i) this increased difficulty is detrimental to the
best interests of the Company's stockholders and that the Company should act to
assure those persons that there will be increased certainty of such protection
in the future and (ii) it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify those persons to the fullest
extent applicable law permits so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.
The Bylaws of the Company require indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law ("DGCL"). The Bylaws and the
DGCL expressly provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be entered into
between the Company and members of the board of directors, officers and other
persons with respect to indemnification.
This Agreement is a supplement to and in furtherance of the Bylaws of
the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
The Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer
-1-
or director without adequate protection, and the Company desires Indemnitee to
serve in such capacity. Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the condition that
he be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
herein, the parties to this Agreement agree as follows:
Section 1. Services by Indemnitee. Indemnitee agrees to serve as a
director and/or officer of the Company and, as mutually agreed by Indemnitee and
the Company, as a director, officer, trustee, general partner, managing member,
employee, agent or fiduciary of other corporations, limited liability companies,
partnerships, joint ventures, trusts or other enterprises (including, without
limitation, employee benefit plans)(each, an "Enterprise"). Indemnitee may at
any time and for any reason resign from any such position (subject to any other
contractual obligation or any obligation applicable law imposes), in which event
the Company will have no obligation under this Agreement to continue Indemnitee
in that position. This Agreement is not and is not to be construed as an
employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment
with the Company (or any of its subsidiaries), if any, is at will, and the
Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between
Indemnitee and the Company (or any of its subsidiaries), other applicable formal
severance policies duly adopted by the Board or, with respect to service as a
director of the Company, by the Company's Certificate of Incorporation, Bylaws
and the DGCL. The foregoing notwithstanding, subject to Section 12, this
Agreement will continue in force after Indemnitee has ceased to serve as an
officer or director of the Company and no longer serves at the request of the
Company as a director, officer, employee, agent or fiduciary of any other
Enterprise.
Section 2. Indemnification--General. The Company will indemnify, and
advance Expenses (as hereinafter defined) to, Indemnitee (i) as this Agreement
permits and (ii) (subject to the provisions hereof) to the fullest extent
applicable law in effect on the date hereof and as amended from time to time
permits. The rights the preceding sentence provide to Indemnitee will include,
but will not be limited to, the rights the other Sections hereof set forth.
Section 3. Proceedings Other Than by or in the Right of the Company.
Indemnitee will be entitled to the rights of indemnification this Section 3
provides if, by reason of his Corporate Status, he is, or is threatened to be
made, a party to or a participant in any threatened, pending or completed
Proceeding (as hereinafter defined), other than a Proceeding by or in the right
of the Company. Pursuant to this Section 3, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses, judgments, penalties, fines (including excise taxes) and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of those Expenses, judgments, fines,
penalties or amounts paid in settlement) actually and reasonably incurred by him
or on his behalf in connection with that Proceeding or any claim, issue or
matter therein, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and, with respect
to any criminal Proceeding, had no reasonable cause to believe his conduct was
unlawful.
-2-
Section 4. Proceedings by or in the Right of the Company. Indemnitee
will be entitled to the rights of indemnification this Section 4 provides if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
or a participant (as a witness or otherwise) in any threatened, pending or
completed Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, the Company will indemnify
Indemnitee against, and will hold Indemnitee harmless from and in respect of,
all Expenses actually and reasonably incurred by him or on his behalf in
connection with that Proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, that no indemnification against those Expenses will
be made in respect of any claim, issue or matter in that Proceeding as to which
Indemnitee has been adjudged to be liable to the Company unless and to the
extent that the Court of Chancery, or the court in which that Proceeding has
been brought or is pending, determines that despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnification.
Section 5. Indemnification for Expenses of a Party Who Is Wholly or
Partly Successful. Notwithstanding any other provision hereof, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of any
Proceeding, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in defense of any Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in that Proceeding, the Company will indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
For purposes of this Section 5 and without limitation, the termination of any
claim, issue or matter in any Proceeding by dismissal, with or without
prejudice, will be deemed to be a successful result as to that claim, issue or
matter.
Section 6. Indemnification for Expenses as a Witness. Notwithstanding
any other provision hereof, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, the Company will indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7. Advancement of Expenses. The Company will advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding within 10 days after the Company receives a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of that Proceeding. Each such
statement must reasonably evidence the Expenses incurred by or on behalf of
Indemnitee and include or be preceded or accompanied by an undertaking by or on
behalf of Indemnitee to repay any Expenses advanced if it ultimately is
determined that Indemnitee is not entitled to be indemnified by the Company
against those Expenses. The Company will accept any such undertaking without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee's ultimate entitlement to indemnification under other
provisions of this Agreement.
Section 8. Procedure for Determination of Entitlement to
Indemnification. (a) Within sixty (60) days after the actual receipt by
Indemnitee of notice that he or she is a party to or a participant (as a witness
or otherwise) in any Proceeding, Indemnitee shall submit to the Company
-3-
a written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee (i) otherwise than under this Agreement, and (ii) under this
Agreement only to the extent the Company can establish that such omission to
notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written
application to indemnify Indemnitee in accordance with this Agreement. Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion. Following such a
written application for indemnification by Indemnitee, the Indemnitee's
entitlement to indemnification shall be determined according to Section 8(c) of
this Agreement.
(c) On written request by Indemnitee for indemnification pursuant to
Section 8(b), a determination, if applicable law requires, with respect to
Indemnitee's entitlement thereto will be made in the specific case: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of
the Board, or (ii) if so requested by the Indemnitee in his or her sole
discretion by an Independent Counsel in a written opinion to the Board, a copy
of which will be delivered to Indemnitee. If it is so determined that
Indemnitee is entitled to indemnification hereunder, the Company will: (i)
within 10 days after that determination pay to Indemnitee all amounts
theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination;
and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within
10 days after that request such additional amounts theretofore incurred by or on
behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination. Indemnitee will cooperate with
the person, persons or entity making the determination with respect to
Indemnitee's entitlement to indemnification under this Agreement, including
providing to such person, persons or entity on reasonable advance request any
documentation or information which is (i) not privileged or otherwise protected
from disclosure, (ii) reasonably available to Indemnitee and (iii) reasonably
necessary to that determination. The Company will bear all costs and expenses
(including attorneys' fees and disbursements) Indemnitee incurs in so
cooperating (irrespective of the determination as to Indemnitee's entitlement to
indemnification) and hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(d) If an Independent Counsel is to make the determination of
entitlement to indemnification pursuant to Section 8(c), the Independent Counsel
will be selected as this Section 8(d) provides. If a Change of Control has not
occurred within two years prior to the date of Indemnitee's written request for
indemnification pursuant to Section 8(a), the Board will select the Independent
Counsel, and the Company will give written notice to Indemnitee advising him of
the identity of the Independent Counsel so selected. If a Change of Control has
occurred within two years prior to the date of that written request, Indemnitee
will select the Independent Counsel (unless Indemnitee requests that the Board
make the selection, in which event the preceding sentence will apply), and
Indemnitee will give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after the written notice of
selection has been given, deliver to the Company or to Indemnitee, as the case
may be, a written objection to the selection; provided, however, that any such
objection may be asserted only on the ground that the Independent Counsel so
selected is not an "Independent Counsel" as Section 17 defines that term, and
the objection must set forth with particularity the factual basis for that
assertion. Absent a proper and timely objection, the person so
-4-
selected shall act as Independent Counsel. If any such written objection is so
made and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until that objection is withdrawn or a court of
competent jurisdiction has determined that objection is without merit. If (i) an
Independent Counsel is to make the determination of entitlement to
indemnification pursuant to Section 8(c) and (ii) within 20 days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 8(a), no Independent Counsel has been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery or other
court of competent jurisdiction for resolution of any objection that has been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the petitioned court or by such other person as the petitioned court
designates, and the person with respect to whom all objections are so resolved
or the person so appointed will act as the Independent Counsel under Section
8(c). The Company will pay any and all reasonable fees and expenses the
Independent Counsel incurs in connection with acting pursuant to Section 8(c),
and the Company will pay all reasonable fees and expenses incident to the
procedures this Section 8(d) sets forth, regardless of the manner in which the
Independent Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee's entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 9. Presumptions and Effect of Certain Proceedings. (a) In
making a determination with respect to entitlement to indemnification hereunder,
the person, persons or entity making that determination must presume that
Indemnitee is entitled to indemnification hereunder if Indemnitee has submitted
a request for indemnification in accordance with Section 8(a), and the Company
will have the burden of proof to overcome that presumption in connection with
the making by any person, persons or entity of any determination contrary to
that presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(b) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or on a plea of nolo
contendere or its equivalent, will not (except as this Agreement otherwise
expressly provides) of itself adversely affect the right of Indemnitee to
indemnification hereunder or create a presumption that Indemnitee did not act in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct was unlawful.
(c) Any action Indemnitee takes or omits to take in connection with
any employee benefit plan will, if taken or omitted in good faith by Indemnitee
and in a manner Indemnitee reasonably believed to be in the interest of the
participants in or beneficiaries of that plan, be deemed
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to have been taken or omitted in a manner "not opposed to the best interests of
the Company" for all purposes hereof.
(d) Reliance as Safe Harbor. For purposes of any determination of
-----------------------
good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise. The
provisions of this Section 9(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this
Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
-----------------
act, of any other director, trustee, partner, managing member, fiduciary,
officer, agent or employee of the Enterprise shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
Section 10. Remedies of Indemnitee. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee's entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 days after
receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding seeking
an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence that proceeding pursuant to
this Section 10(a); provided, however, that this sentence will not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5.
(b) If a determination has been made pursuant to Section 8(c) that
Indemnitee is not entitled to indemnification hereunder, any judicial proceeding
or arbitration commenced pursuant to this Section 10 will be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee will
not be prejudiced by reason of that adverse determination. In any judicial
proceeding or arbitration commenced pursuant to this Section 10, the Company
will have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be and the Company
may not refer to or introduce into evidence any determination pursuant to
Section 8(c) of this Agreement adverse to Indemnitee for any purpose. If
Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 10, Indemnitee shall not be required to reimburse the Company for any
advances pursuant to Section 7 until a final determination is made
-6-
with respect to Indemnitee's entitlement to indemnification (as to which all
rights of appeal have been exhausted or lapsed).
(c) If a determination has been made pursuant to Section 8(c) that
Indemnitee is entitled to indemnification hereunder, the Company will be bound
by that determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission by Indemnitee of a material fact necessary to make
Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee will be entitled to
recover from the Company, and will be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 18) actually and reasonably incurred by him in that judicial
adjudication or arbitration, but only if he prevails therein. If it is
determined in that judicial adjudication or arbitration that Indemnitee is
entitled to receive part of, but not all, the indemnification or advancement of
expenses sought, the Expenses incurred by Indemnitee in connection with that
judicial adjudication or arbitration will be appropriately prorated between
those in respect of which this Section 10(d) entitles Indemnitee to
indemnification and those Indemnitee must bear.
(e) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent
permitted by law against all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after the Company's receipt of such written request)
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for
(i) indemnification or advances of Expenses by the Company under this Agreement
or any other agreement or provision of the Company's Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance or insurance recovery, as the case may
be.
Section 11. Non-exclusivity; Survival of Rights; Insurance;
Subrogation. (a) The rights to indemnification and advancement of Expenses
this Agreement provides are not and will not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under applicable law, the
Company's Certificate of Incorporation, the Company's Bylaws, any agreement, a
vote of stockholders or a resolution of directors, or otherwise. No amendment,
alteration or termination of this Agreement or any provision hereof will limit
or restrict any right of Indemnitee hereunder in respect of any action
Indemnitee has taken or omitted in his Corporate Status prior to that amendment,
alteration or termination. To the extent that a change in Delaware law (whether
by statute or judicial decision) permits greater indemnification by agreement
than would be afforded currently under this Agreement, it is the intent and
agreement of the parties hereto that Indemnitee
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will enjoy by this Agreement the greater benefits that change affords. No right
or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
(b) If the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing
members, employees, agents or fiduciaries of the Company or of any other
Enterprise that any such person serves at the request of the Company, Indemnitee
will be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer,
trustee, partner, managing member, employee, agent or fiduciary under such
policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness
or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers
in accordance with the procedures set forth in the respective policies. 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 policies.
(c) The Company will not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received that payment or obtained the entire benefit therefrom under any
insurance policy, contract, agreement or otherwise.
(d) If the Company makes any payment hereunder, it will be subrogated
to the extent of that payment to all the rights of recovery of Indemnitee, who
will execute all papers required and take all action necessary to secure those
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce those rights.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee with respect to Indemnitee's service at the request of
the Company as a director, officer, employee, agent or fiduciary of any other
Enterprise will be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from that other Enterprise.
Section 12. Duration of Agreement. This Agreement will continue
until and terminate on the later of: (i) 10 years after the date that
Indemnitee has ceased to serve as a director or officer of the Company or as a
director, officer, trustee, partner, managing partner, employee, agent or
fiduciary of any other Enterprise that Indemnitee served on behalf of the
Company at the request of the Company; or (ii) one year after the final
termination of any Proceeding (including any rights of appeal thereto) then
pending in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 10 relating thereto including any rights of appeal of any
Section 10 Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
-8-
Section 13. Severability. If any provision or provisions of this
Agreement is or are invalid, illegal or unenforceable for any reason whatsoever:
(i) the validity, legality and enforceability of the remaining provisions hereof
(including, without limitation, each portion of any Section containing any such
invalid, illegal or unenforceable provision which is not itself invalid, illegal
or unenforceable) will not in any way be affected or impaired thereby; (ii) such
provision or provisions will be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any provision in this Agreement, the Company shall
not be obligated under this Agreement to make any indemnity in connection with
any claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount actually received under any insurance
policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act or similar provisions of state statutory
law or common law; or
(c) except as otherwise provided in Sections 10(d) - (f) hereof, prior
to a Change in Control, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 15. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director or officer of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 16. Identical Counterparts. This Agreement may be executed
in one or more counterparts, each of which will for all purposes be deemed to be
an original but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party
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against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement.
Section 17. Headings. The headings of the Sections hereof are
inserted for convenience only and do not and will not be deemed to constitute
part of this Agreement or to affect the construction thereof.
Section 18. Definitions. For purposes of this Agreement:
"Acquiring Person" means any Person who or which, together with all
its Affiliates and Associates, is or are the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, but does not include
any Exempt Person; provided, however, that a Person will not be or become
an Acquiring Person if that Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding which results from the
Company's direct or indirect repurchase of Common Stock, unless and until
such time as that Person or any Affiliate or Associate of that Person
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person, unless, in either such case, that Person,
together with all its Affiliates and Associates, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding.
Notwithstanding anything in this definition of "Acquiring Person" to
the contrary, so long as Main Street Merchant Partners II, L.P., a Delaware
limited partnership ("Main Street"), together with all Affiliates and
Associates thereof, remains the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, Main Street and any Affiliate or
Associate thereof will not be or become an Acquiring Person unless and
until that Person, together with all Affiliates and Associates thereof,
purchases or otherwise becomes the Beneficial Owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner of shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock becomes an Affiliate or
Associate of that Person unless, in either such case, that Person, together
with all Affiliates and Associates of that Person, is not then the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding.
"Affiliate" has the meaning Exchange Act Rule 12b-2 specifies.
"Associate" means, with reference to any Person, (i) any corporation,
firm, partnership, limited liability company, association, unincorporated
organization or other entity (other than the Company or a subsidiary of the
Company) of which that Person is an officer or general partner (or officer
or general partner of a general partner) or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of its equity securities or
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interests, (ii) any trust or other estate in which that Person has a
substantial beneficial interest or for or of which that Person serves as
trustee or in a similar fiduciary capacity and (iii) any relative or spouse
of that Person, or any relative of that spouse, who has the same home as
that Person.
A specified Person is deemed the "Beneficial Owner" of, and is deemed
to "beneficially own," any securities:
(i) of which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, is the "beneficial owner" (as
determined pursuant to Exchange Act Rule 13d-3) or otherwise has the
right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person will not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (i) as
a result of an agreement, arrangement or understanding to vote that
security if that agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
(that is, not including a solicitation exempted by Exchange Act Rule
14a-2(b)(2)) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act; and
(B) is not then reportable by that Person on Exchange Act Schedule 13D
(or any comparable or successor report);
(ii) which that Person or any of that Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
acquire (whether that right or obligation is exercisable or effective
immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or on the exercise of conversion rights,
exchange rights, other rights, warrants or options, or otherwise;
provided, however, that a Person will not be deemed the "Beneficial
Owner" of, or to "beneficially own," securities tendered pursuant to a
tender or exchange offer made by that Person or any of that Person's
Affiliates or Associates until those tendered securities are accepted
for purchase or exchange; or
(iii) which are beneficially owned, directly or indirectly, by
(A) any other Person (or any Affiliate or Associate thereof) with
which the specified Person or any of the specified Person's Affiliates
or Associates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any
voting securities of the Company or (B) any group (as Exchange Act
Rule 13d-5(b) uses that term) of which that specified Person is a
member;
provided, however, that nothing in this definition will cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities that Person acquires
through its participation in good faith in a firm commitment underwriting
(including, without limitation, securities acquired pursuant to stabilizing
-11-
transactions to facilitate a public offering in accordance with Exchange
Act Regulation M or to cover overallotments created in connection with a
public offering) until the expiration of 40 days after the date of that
acquisition. For purposes of this definition, "voting" a security includes
voting, granting a proxy, acting by consent, making a request or demand
relating to corporate action (including, without limitation, calling a
stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of that security.
"Change of Control" means the occurrence of any of the following
events that occurs after the IPO Closing Date: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the
Company with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately
after that occurrence, any Person, other than an Exempt Person, together
with all Affiliates and Associates of that Person (other than Exempt
Persons), will be the Beneficial Owner of 15% or more of the total voting
power of the then outstanding Voting Shares of the Person surviving that
transaction (in the case or a merger or consolidation) or the Person
acquiring those properties and assets substantially as an entirety unless
that Person, together with all its Affiliates and Associates, was the
Beneficial Owner of 15% or more of the shares of Common Stock outstanding
prior to that transaction; (iv) the approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or series
of agreements for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) occurs any other event of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any similar item on any
similar schedule or form) promulgated under the Exchange Act (as defined
below), whether or not the Company is then subject to such reporting
requirement.
"Common Stock" means (i) the common stock, par value $.001 per share,
of the Company and (ii) any other class of capital stock of the Company
which is (A) except for less voting rights, identical to the common stock
clause (i) of this definition describes and (B) convertible into that
common stock on a share for share basis on the occurrence of a Change of
Control.
"Continuing Director" means at any time any individual who then (i) is
a member of the Board and was a member of the Board as of the IPO Closing
Date or whose nomination for his first election, or that first election, to
the Board following that date was recommended or approved by a majority of
the then Continuing Directors (acting separately or as a part of any action
taken by the Board or any committee thereof) and (ii) is not an Acquiring
Person, an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or of any such Affiliate or
Associate.
"Corporate Status" describes the status of a natural person who is or
was a director, officer, trustee, general partner, managing member,
employee or agent of the Company or of any other Enterprise, provided that
person is or was serving in that capacity at the request of the Company.
For purposes of this Agreement, "serving at the request of the Company"
-12-
includes any service by Indemnitee which imposes duties on, or involves
services by, Indemnitee with respect to any employee benefit plan or its
participants or beneficiaries.
"Court of Chancery" means the Court of Chancery of the State of
Delaware.
"Disinterested Director" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee hereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempt Person" means: (i)(A) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or of any subsidiary of
the Company and (B) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of
the Company or any subsidiary of the Company; and (ii) Indemnitee, any
Affiliate or Associate of Indemnitee or any group (as Exchange Act Rule
13d-5(b) uses that term) of which Indemnitee or any Affiliate or Associate
of Indemnitee is a member.
"Expenses" include all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding and all interest or finance
charges attributable to any thereof. Should any payments by the Company
under this Agreement be determined to be subject to any federal, state or
local income or excise tax, "Expenses" also will include such amounts as
are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such
tax been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and
other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its equivalent. Expenses, however, shall not include amounts paid
in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.
"Independent Counsel" means a law firm, or a member of a law firm,
that or who is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company, its affiliates or Indemnitee in any matter material to any
such party; or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" does not include at any time any person who,
under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
"IPO" means the first time a registration statement the Company has
filed under the Securities Act of 1933, as amended, and respecting an
underwritten primary offering by the
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Company of shares of Common Stock becomes effective under that Act and the
Company issues and sells any of the shares registered by that registration
statement.
"IPO Closing Date" means the date on which the Company first receives
payment for the shares of Common Stock it sells in the IPO.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or
employee organization or governmental authority.
"Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the Company, or
by reason of the fact that he is or was serving at the request of the
Company as a director, officer, trustee, general partner, managing member,
fiduciary, employee or agent of any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of
expenses can be provided under this Agreement.
"Voting Shares" means: (i) in the case of any corporation, stock of
that corporation of the class or classes having general voting power under
ordinary circumstances to elect a majority of that corporation's board of
directors; and (ii) in the case of any other entity, equity interests of
the class or classes having general voting power under ordinary
circumstances equivalent to the Voting Shares of a corporation.
Section 19. Modification and Waiver. No supplement to or
modification or amendment of this Agreement will be binding unless executed in
writing by both parties hereto. No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any other provisions
hereof (whether or not similar), nor will any such waiver constitute a
continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to
notify the Company in writing on being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses hereunder; provided, however, a failure to give that notice will not
deprive Indemnitee of his rights to indemnification and advancement of Expenses
hereunder unless the Company is actually and materially prejudiced thereby.
Section 21. Notices. All notices, requests, demands and other
communications hereunder must be in writing and will be deemed delivered and
received (i) if personally delivered or if delivered by telex, telegram,
facsimile or courier service, when actually received by the party
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to whom the notice or communication is sent or (ii) if delivered by mail
(whether actually received or not), at the close of business on the third
business day in the city in which the Company's principal executive office is
located next following the day when placed in the mail, postage prepaid,
certified or registered, addressed to the appropriate party at the address of
that party set forth below (or at such other address as that party may designate
by written notice to the other party in accordance herewith):
(a) If to Indemnitee, to: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy (which will not constitute notice for the purposes of
this Agreement) to such legal counsel, if any, as the Indemnitee
may designate in writing; and
(b) If to the Company, to: U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Section 22. Contribution. To the fullest extent applicable law
permits, if the indemnification this Agreement provides is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving rise to that Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers,
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
Section 23. Governing Law; Submission to Jurisdiction. This
Agreement and the legal relations among the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration Indemnitee commences pursuant to Section 10(a), the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement will be brought
only in the Court of Chancery and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Court of Chancery for purposes of
any action or proceeding arising out of or in connection with this Agreement,
(iii) waive any objection to the laying of venue of any such action or
proceeding in the Court of Chancery and (iv) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court of
Chancery has been brought in an improper or otherwise inconvenient forum.
Section 24. Miscellaneous. Use of one gender herein includes usage
of each other gender where appropriate. This Agreement uses the words "herein,"
"hereof" and words of similar
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import to refer to this Agreement as a whole and not to any provision of this
Agreement, and the word "Section" refers to a Section of this Agreement, unless
otherwise specified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: U.S. CONCRETE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- ---------------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
ATTEST: INDEMNITEE:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------- -------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
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