Form of] INDEMNITY AGREEMENT (for directors and officers of CenturyTel, Inc.)
Exhibit
10.4(e)
[Form
of]
(for
directors and officers of CenturyTel, Inc.)
This
Agreement is made as of the _____ day of _______________, by and between
CenturyTel , Inc., a Louisiana corporation (the “Corporation”), and
_______________ (“Indemnitee”).
In
consideration of Indemnitee’s service as [a director][an officer] commencing on
the date hereof, the Corporation and Indemnitee do hereby agree as
follows:
1. Agreement
to Serve.
Indemnitee agrees to serve as [a director][an officer] of the Corporation for
so
long as he is elected or appointed or until such earlier time as he tenders
his
resignation in writing.
2. Definitions.
As used
in this Agreement:
(a) The
term
“Expenses” shall mean any expenses or costs (including, without limitation,
attorney’s fees, judgments, punitive or exemplary damages, fines and amounts
paid in settlement). If any of the foregoing amounts paid on behalf of
Indemnitee are not deductible by Indemnitee for federal or state income tax
purposes, the Corporation will reimburse Indemnitee for tax liability with
respect thereto by paying to Indemnitee an amount which, after taking into
account taxes on such amount, equals Indemnitee’s incremental tax
liability.
(b) The
term
“Claim” shall mean any threatened, pending or completed claim, action, suit, or
proceeding, whether civil, criminal, administrative or investigative and whether
made judicially or extra-judicially, or any separate issue or matter therein,
as
the context requires.
(c) The
term
“Determining Body” shall mean (i) those members of the Board of Directors who
are not named as parties to the Claim for which indemnification is being sought
(“Impartial Directors”), if there are at least three Impartial Directors, or
(ii) a committee of at least three directors appointed by the Board of Directors
(regardless whether the members of the Board of Directors voting on such
appointment are Impartial Directors) and composed of Impartial Directors or
(iii) if there are fewer than three Impartial Directors or if the Board of
Directors or a committee appointed thereby so directs (regardless whether the
members thereof are Impartial Directors), independent legal counsel, which
may
be the regular outside counsel of the Corpora-tion.
3. Limitation
of Liability.
To
the
fullest extent permitted by Article VII of the Articles of Incorporation of
the
Corporation in effect on the date hereof and, if and to the extent such Article
VII is amended to permit further limitations, in effect at any time prior to
the
determination of liability that would exist but for the provisions of this
Agreement, Indemnitee shall not be liable for breach of his fiduciary duty
as a
director or officer.
4. Maintenance
of Insurance and Self-Insurance.
(a) The
Corporation represents that it presently maintains in force and effect directors
and officers liability insurance (“D&O Insurance”) policies that provide
primary and excess coverage on behalf of the Corporation’s directors and
officers on the terms and conditions specified therein (the “Insurance
Policies”). Subject only to the provisions of Section 4(b) hereof, the
Corporation hereby agrees that, so long as Indemnitee shall continue to serve
as
[a director][an officer] (or shall continue at the request of the Corporation
to
serve in any capacity referred to in Section 5(a) hereof) and thereafter so
long
as Indemnitee shall be subject to any possible Claim, the Corporation shall
use
its best efforts to purchase and maintain in effect for the benefit of
Indemnitee one or more valid and enforceable policy or policies of D&O
Insurance providing, in all respects, coverage reasonably comparable to that
currently provided pursuant to the Insurance Policies, provided that the
Corporation shall have no obligation to provide primary coverage in excess
of
$15 million or excess coverage in excess of $20 million.
(b) The
Corporation shall not be required to purchase and maintain the Insurance
Policies in effect if D&O Insurance is not reasonably available or if, in
the reasonable business judgment of the then directors of the Corporation,
either (i) the premium cost for such insurance is excessive in light of the
amount of coverage or (ii) the coverage provided by such insurance is so limited
by exclusions, retentions, deductibles or otherwise that there is insufficient
benefit from such insurance.
(c) If
the
Corporation does not purchase and maintain in effect the Insurance Policies
pursuant to the provisions of Section 4(b) hereof, the Corporation agrees to
hold harmless and indemnify Indemnitee to the full extent of the coverage that
would otherwise have been provided for the benefit of Indemnitee pursuant to
the
Insurance Policies.
5. Additional
Indemnity.
(a) To
the
extent any Expenses incurred by Indemnitee are in excess of the amounts
reimbursed or indemnified pursuant to the provisions of Section 4 hereof, the
Corporation shall indemnify and hold harmless Indemnitee against any such
Expenses actually and reasonably incurred, as they are incurred, in connection
with any Claim against Indemnitee (whether as a subject of or party to, or
a
proposed or threatened subject of or party to, the Claim) or in which Indemnitee
is involved solely as a witness or person required to give evidence, by reason
of his position
(i) as
a
director or officer of the Corporation,
(ii) as
a
director or officer of any subsidiary of the Corporation or as a fiduciary
with
respect to any employee benefit plan of the Corporation, or
(iii) as
a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other for profit or not for profit entity or enterprise,
if
such position is or was held at the request of the Corporation,
whether
relating to service in such position before or after the effective date of
this
Agreement, if (i) the Indemnitee is successful in his defense of the Claim
on
the merits or otherwise or (ii) the Indemnitee has been found by the Determining
Body (acting in good faith) to have met the Standard of Conduct; provided that
(a) the amount of Expenses for which the Corporation shall indemnify Indemnitee
may be reduced by the Determining Body to such amount as it deems proper if
it
determines in good faith that the Claim involved the receipt of a personal
benefit by Indemnitee and (b) no indemnification shall be made in respect of
any
Claim as to which Indemnitee shall have been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable for
willful or intentional misconduct in the performance of his duty to the
Corporation or to have obtained an improper personal benefit, unless, and only
to the extent that, a court shall determine upon application that, despite
the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such Expenses
as
the court shall deem proper; and provided further that, if the Claim involves
Indemnitee by reason of his position with an entity or enterprise described
in
clause (ii) or (iii) of this Section 5(a) and if Indemnitee may be entitled
to
indemnification with respect to such Claim from such entity or enterprise,
Indemnitee shall be entitled to indemnification hereunder only (x) if he has
applied to such entity or enterprise for indemnification with respect to the
Claim and (y) to the extent that indemnification to which he would be entitled
hereunder but for this proviso exceeds the indemnification paid by such other
entity or enterprise.
(b) For
purposes of this Agreement, the Standard of Conduct is met when conduct by
an
Indemnitee with respect to which a Claim is asserted was conduct that he
reasonably believed to be in, or not opposed to, the best interest of the
Corporation, and, in the case of a Claim which is a criminal action or
proceeding, conduct that the Indemnitee had no reasonable cause to believe
was
unlawful. The termination of any Claim by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of
itself, create a pre-sumption that Indemnitee did not meet the Standard of
Conduct.
(c) Promptly
upon becoming aware of the existence of any Claim, Indemnitee shall notify
the
Chief Executive Officer of the existence of the Claim, who shall promptly advise
the members of the Board of Directors and that establishing the Determining
Body
will be a matter presented at the next regularly scheduled meeting of the Board
of Directors. After the Determining Body has been established the Chief
Executive Officer shall inform Indemnitee thereof and Indemnitee shall
immediately notify the Determining Body of all facts relevant to the Claim
known
to such Indemnitee. Within 60 days of the receipt of such notice and
information, together with such additional information as the Determining Body
may request of Indemnitee, the Determining Body shall report to Indemnitee
of
its determination whether Indemnitee has met the Standard of Conduct. The
Determining Body may extend the period of time for determining whether the
Standard of Conduct has been met, but in no event shall such period of time
be
extended beyond an additional sixty days.
(d) If,
after
determining that the Standard of Conduct has been met, the Determining Body
obtains facts of which it was not aware at the time it made such determination,
the Determining Body on its own motion, after notifying Indemnitee and providing
him an opportunity to be heard, may, on the basis of such facts, revoke such
determination, provided that, in the absence of actual fraud by Indemnitee,
no
such revocation may be made later than thirty days after final disposition
of
the Claim.
(e) Indemnitee
shall promptly inform the Determining Body upon his becoming aware of any
relevant facts not theretofore provided by him to the Determining Body, unless
the Determining Body has obtained such facts by other means.
(f) In
the
case of any Claim not involving a proposed, threatened or pending criminal
proceeding,
(i) if
Indemnitee has, in the good faith judgment of the Determining Body, met the
Standard of Conduct, the Corporation may, in its sole discretion, assume all
responsibility for the defense of the Claim, and, in any event, the Corporation
and Indemnitee each shall keep the other informed as to the progress of the
defense of the Claim, including prompt disclosure of any proposals for
settlement; provided that if the Corporation is a party to the Claim and
Indemnitee reasonably determines that there is a conflict between the positions
of the Corporation and Indemnitee with respect to the Claim, then Indemnitee
shall be entitled to conduct his defense with counsel of his choice; and
provided further that Indemnitee shall in any event be entitled at his expense
to employ counsel chosen by him to participate in the defense of the Claim;
and
(ii) the
Corporation shall fairly consider any proposals by Indemnitee for settlement
of
the Claim. If the Corporation proposes a settlement of the Claim and such
settlement is acceptable to the person asserting the Claim or the Corporation
believes a settlement proposed by the person asserting the Claim should be
accepted, it shall inform Indemnitee of the terms of such proposed settlement
and shall fix a reasonable date by which Indemnitee shall respond. If Indemnitee
agrees to such terms, he shall execute such documents as shall be necessary
to
make final the settlement. If Indemnitee does not agree with such terms,
Indemnitee may proceed with the defense of the Claim in any manner he chooses,
provided that if Indemnitee is not successful on the merits or otherwise, the
Corporation’s obligation to indemnify such Indemnitee as to any Expenses
incurred following his disagreement shall be limited to the lesser of (A) the
total Expenses incurred by Indemnitee following his decision not to agree to
such proposed settlement or (B) the amount that the Corporation would have
paid
pursuant to the terms of the proposed settlement. If, however, the proposed
settlement would impose upon Indemnitee any re-quirement to act or refrain
from
acting that would materially interfere with the conduct of Indemnitee’s affairs,
Indemnitee shall be permitted to refuse such settlement and proceed with the
defense of the Claim, if he so desires, at the Corporation’s expense in
accordance with the terms and conditions of this Agreement without regard to
the
limitations imposed by the immediately preceding sentence. In any event, the
Corporation shall not be obligated to indemnify Indemnitee for an amount paid
in
a settlement that the Corporation has not approved.
(g) In
the
case of a Claim involving a proposed, threatened or pending criminal proceeding,
Indemnitee shall be entitled to conduct the defense of the Claim and to make
all
decisions with respect thereto, with counsel of his choice; provided that the
Corporation shall not be obligated to indemnify Indemnitee for an amount paid
in
settlement that the Corporation has not approved.
(h) After
notification to the Corporation of the existence of a Claim, Indemnitee may
from
time to time request of the Chief Executive Officer or, if the Chief Executive
Officer is a party to the Claim as to which indemnification is being sought,
any
officer who is not a party to the Claim and who is designated by the Chief
Executive Officer (the “Disbursing Officer”), which designation shall be made
promptly after receipt of the initial request, that the Corporation advance
to
Indemnitee the Expenses (other than fines, penalties, judgments or amounts
paid
in settlement) that he incurs in pursuing a defense of the Claim prior to the
time that the Determining Body determines whether the Standard of Conduct has
been met. The Disbursing Officer shall pay to Indemnitee the amount requested
(regardless of Indemnitee’s apparent ability to repay the funds) upon receipt of
an undertaking by or on behalf of Indemnitee to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation under the circumstances, provided that if the Disbursing Officer
does not believe such amount to be reasonable, he shall advance the amount
deemed by him to be reasonable and Indemnitee may apply directly to the
Determining Body for the remainder of the amount requested.
(i) After
a
determination that the Standard of Conduct has been met, for so long as and
to
the extent that the Corporation is required to indemnify Indemnitee under this
Agreement, the provisions of Paragraph (h) shall continue to apply with respect
to Expenses incurred after such time except that (i) no undertaking shall be
required of Indemnitee and (ii) the Disbursing Officer shall pay to Indemnitee
the amount of any fines, penalties or judgments against him which have become
final for which the Corporation is obligated to indemnify him or any amount
of
indemnification ordered to be paid to him by a court.
(j) Any
determination by the Corporation with respect to settlement of a Claim shall
be
made by the Determining Body.
(k) The
Corporation and Indemnitee shall keep confidential to the extent permitted
by
law and their fiduciary obligations all facts and determinations provided
pursuant to or arising out of the operation of this Agreement and the
Corporation and Indemnitee shall instruct its or his agents and employees to
do
likewise.
6. Enforcement.
(a) The
rights provided by this Agreement shall be enforceable by Indemnitee in any
court of competent jurisdiction.
(b) If
Indemnitee seeks a judicial adjudica-tion of his rights under, or to recover
damages for breach of, this Agreement, Indemnitee shall be entitled to recover
from the Corporation, and shall be indemnified by the Corporation against,
any
and all Expenses actually and reasonably incurred by him in connection with
such
proceeding, but only if he prevails therein. If it shall be determined that
Indemnitee is entitled to receive part but not all of the relief sought, then
Indemnitee shall be entitled to be reimbursed for all Expenses incurred by
him
in connection with such proceeding if the indemnification amount to which he
is
determined to be entitled exceeds 50% of the amount of his claim. Otherwise,
the
Expenses incurred by Indemnitee in connection with such judicial adjudication
shall be appropriately prorated.
(c) In
any
judicial proceeding described in this Section 6, the Corporation shall bear
the
burden of proving that Indemnitee is not entitled to Expenses sought with
respect to any Claim.
7. Saving
Clause.
If any
provision of this Agreement is determined by a court having jurisdiction over
the matter to require the Corporation to do or refrain from doing any act that
is in violation of applicable law, the court shall be empowered to modify or
reform such provision so that, as modified or reformed, such provision provides
the maximum indemnification permitted by law and such provision, as so modified
or reformed, and the balance of this Agreement, shall be applied in accordance
with their terms. Without limiting the generality of the foregoing, if any
portion of this Agreement shall be invalidated on any ground, the Corporation
shall nevertheless indemnify Indemnitee to the full extent permitted by any
applicable portion of this Agreement that shall not have been invalidated and
to
the full extent permitted by law with respect to that portion that has been
invalidated.
8. Non-Exclusivity.
(a) The
indemnification and payment of Expenses provided by or granted pursuant to
this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
is or may become entitled under any statute, article of incorporation, by-law,
authorization of shareholders or directors, agreement or otherwise.
(b) It
is the
intent of the Corporation by this Agree-ment to indemnify and hold harmless
Indemnitee to the fullest extent permitted by law, so that if applicable law
would permit the Corporation to provide broader indemnification rights than
are
currently permitted, the Corporation shall indemnify and hold harmless
Indemnitee to the fullest extent permitted by applicable law notwithstanding
that the other terms of this Agreement would provide for lesser
indemnification.
9. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
constitute the original.
10. Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Louisiana.
11. Successors
and Assigns.
This
Agreement shall be binding upon Indemnitee and upon the Corporation, its
successors and assigns, and shall inure to the benefit of Indemnitee’s heirs,
personal representatives, and assigns and to the benefit of the Corporation,
its
successors and assigns.
12. Amendment.
No
amendment, modification, termination or cancellation of this Agreement shall
be
effective unless made in writing signed by the Corporation and Indemnitee.
Notwithstanding any amendment or modification to or termination or cancellation
of this Agreement or any portion hereof, Indemnitee shall be entitled to
indemnification in accordance with the provisions hereof with respect to any
acts or omissions of Indemnitee which occur prior to such amendment,
modification, termination or cancellation.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed and signed as
of
the date and year first above written.
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CenturyTel,
Inc.
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By:
_______________________
▇▇▇▇
▇. Post, III
Chairman
and Chief Executive Officer
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________________________
[Insert Name of Indemnitee]
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