1
Exhibit 10.15
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of this 4th day
of September, 1996 by and between Office Depot, Inc., a Delaware corporation
(the "Company") and ____________________ ("Indemnitee"), a director and/or
officer of the Company.
WHEREAS, the Company and Indemnitee recognize the increasing difficulty
in obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance, and the general reductions in the
coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation subjecting officers and directors to expensive
litigation risks at the same time as liability insurance has been severely
limited;
WHEREAS, Indemnitee does not regard the current protection available as
adequate given the present circumstances, and Indemnitee and other officers and
directors of the Company may not be willing to serve as officers and directors
without adequate protection; and
WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve as officers and
directors of the Company and to indemnify its officers and directors so as to
provide them with the maximum protection permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company or any subsidiary of the
Company or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe Indemnitee's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plan of NOLO CONTENDERE or
its equivalent, shall not, of itself, create a presumption that Indemnitee did
not act in
- 1 -
2
good faith and in a manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that Indemnitee's conduct
was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending, or completed action or suit by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company or any subsidiary of the Company, or
by reason of the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of such action or suit if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company and except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which Indemnitee shall have been adjudged to be liable to the Company unless and
only to the extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all of the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses that the Court of Chancery of the State of Delaware
or such other court shall deem proper.
(c) MANDATORY PAYMENT OF EXPENSES. To the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in Subsection (a) or (b) of this Section
1 or in defense of any claim, issue, or matter therein, Indemnitee shall be
indemnified against expenses (including attorneys' fees) and any costs of
settlement actually and reasonably incurred by Indemnitee in connection
therewith.
2. AGREEMENT TO SERVE. In consideration of this Agreement, Indemnitee
agrees to continue to serve as an officer or director of the Company, at the
will of the Company (or under separate agreement, if such agreement exists), in
the capacity in which Indemnitee currently serves and in any other capacity as
an officer or director of the Company or any subsidiary of the Company
subsequently assigned to Indemnitee, so long as Indemnitee is duly appointed or
elected and qualified in accordance with the applicable provisions of the
by-laws of the Company or any subsidiary of the Company or until such time as
Indemnitee tenders his or her resignation in writing; provided however, that
nothing contained in this Agreement is intended to create in Indemnitee any
right to continued employment.
3. Expenses; Indemnification Procedure.
(a) ADVANCEMENT OF EXPENSES. The Company shall advance all
expenses incurred by Indemnitee, and, to the fullest extent permitted by law,
amounts paid in settlement by Indemnitee in connection with the investigation,
defense, settlement, or appeal of any civil or criminal action, suit, or
proceeding referenced in Subsection (a) or (b) of Section 1. Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that Indemnitee is not entitled to be indemnified
by the Company as authorized hereby. The advances
- 2 -
3
to be made hereunder shall be paid by the Company to Indemnitee within 20 days
following delivery of a written request therefor by Indemnitee to the Company.
(b) COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to his right to be indemnified under this Agreement, give
the Company notice in writing as soon as practicable of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.
(c) PROCEDURE. Any indemnification and advances provided for
in Section 1 and this Section 3 shall be made no later than 20 days after
receipt of the written request of Indemnitee. If a claim under this Agreement,
under any statute, or under any provision of the Company's certificate of
incorporation or by-laws providing for indemnification, is not paid in full by
the Company within 20 days after a written request for payment thereof has first
been received by the Company, Indemnitee may, but need not, at any time
thereafter bring an action against the Company to recover the unpaid amount of
the claim and, subject to Section 12 of this Agreement, Indemnitee shall also be
entitled to be paid for the expenses (including attorneys' fees) of bringing
such action. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in connection with any action,
suit, or proceeding in advance of its final disposition) that Indemnitee has not
met the standards of conduct that make it permissible under applicable law for
the Company to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Company and Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 3(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the parties' intention that if the Company
contests Indemnitee's right to indemnification, the question of Indemnitee's
right to indemnification shall be for the court to decide, and neither the
failure of the Company (including its board of directors, any committee or
subgroup of its board of directors, independent legal counsel, or its
stockholders) to have made a determination that indemnification of Indemnitee is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct required by applicable law, nor an actual determination by the
Company (including its board of directors, any committee or subgroup of the
board of directors, independent legal counsel, or its stockholders) that
Indemnitee has not met such applicable standard of conduct shall be dispositive.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a
notice of a claim pursuant to Section 3(b) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement 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.
(e) SELECTION OF COUNSEL. In the event the Company shall be
obligated under Section 3(a) hereof to pay the expenses of any proceeding
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee, and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, provided, that
- 3 -
4
(i) Indemnitee shall have the right to employ his counsel in any such proceeding
at Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
4. Additional Indemnification Rights; Non-Exclusivity.
(a) SCOPE. Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the full
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company's
certificate of incorporation, by-laws, or by statute. In the event of any
changes, after the date of this Agreement, in any applicable law, statute, or
rule that expand the right of a Delaware corporation to indemnify a member of
its board of directors or its officers, such changes shall be, ipso facto,
within the purview of Indemnitee's rights and the Company's obligations under
this Agreement. In the event of any changes in any applicable law, statute, or
rule that narrow the right of a Delaware corporation to indemnify a member of
its board of directors, such changes, to the extent not otherwise required by
such law, statute, or rule to be applied to this Agreement shall have no effect
on this Agreement or the parties' rights and obligations hereunder.
(b) NON-EXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which an Indemnitee may
be entitled under the Company's certificate of incorporation, by-laws, any
agreement, any vote of stockholders or disinterested Directors, the General
Corporation Law of the State of Delaware, or otherwise, both as to action in
Indemnitee's official capacity and as to action in another capacity while
holding such office. The indemnification provided under this Agreement shall
continue as to Indemnitee for any action taken or not taken while serving in an
indemnified capacity even though he may have ceased to serve in such capacity at
the time of any action, suit, or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal, or settlement of any
civil or criminal action, suit, or proceeding, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion of such expense, judgments, fines, or penalties to which Indemnitee is
entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, federal law will override Delaware law and prohibit
the Company from indemnifying its directors and officers. For example, the
Company and Indemnitee acknowledge that the Securities and Exchange Commission
has taken the position that indemnification is not permissible for liabilities
arising under certain federal securities laws and federal legislation prohibits
indemnification for certain violations of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Indemnitee understands and
acknowledges that in the event the Company undertakes a public offering of its
securities pursuant to a registration with the Securities and Exchange
Commission (the "SEC"), the Company may be required to undertake with the SEC to
-4-
5
submit the question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.
7. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability pursuant to court order to
perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 7. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
8. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) EXCLUDED ACTIONS OR OMISSIONS. To indemnify Indemnitee for
indemnitee's actions, omissions or transactions from which Indemnitee may not be
relieved of liability under applicable law;
(b) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the General Corporation Law of the State of Delaware, but such
indemnification or advancement of expenses may be provided by the Company in
specific cases if the Company's board of directors finds it to be appropriate;
(c) LACK OF GOOD FAITH. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
(d) INSURED CLAIMS. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) that
have been paid directly to Indemnitee by an insurance carrier under a policy of
director and officer liability insurance maintained by the Company; or
(e) CLAIMS UNDER SECTION 16(B). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
9. Construction of Certain Phrases.
(a) For purposes of this Agreement, references to the "Company"
shall include, in addition to Office Depot, Inc., any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger, so that if Indemnitee is or was a director, officer,
-5-
6
employee, or agent of such constituent corporation or is or was serving at the
request of such constituent corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee, or agent of the Company
that imposes duties on, or involves services by, such director, officer,
employee, or agent with respect to an employee benefit plan, its participants,
or beneficiaries; and if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have
acted in a manner "not opposed to the best interests of the Company" as referred
to in this Agreement.
10. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall constitute an original.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives, and assigns.
12. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
13. NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed duly given on the
third business day after the date postmarked, if sent by domestic certified or
registered mail with postage prepaid, or, if delivered by other means, on the
date actual notice is received. Notice to the Company shall be directed to the
President of the Company. The addresses for such notice to Indemnitee is as
shown on the signature page of this Agreement, or as subsequently modified by
written notice.
14. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding that arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Delaware.
- 6 -
7
15. GOVERNING LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Delaware.
- 7 -
8
IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the date first above written.
OFFICE DEPOT, INC.
By:_______________________________
Its:_______________________________
INDEMNITEE:
------------------------------
(signature)
------------------------------
(type or print name)
------------------------------
------------------------------
(address)
- 8 -