INDEMNIFICATION AGREEMENT
(Non-Employee Director)
This Indemnification Agreement ("Agreement") is made as of the 15th
day of August, 1996, by and between The Dial Corporation (the "Corporation"),
a Delaware corporation, and _______________, a Director of the Corporation
(the "Director").
Recitals
A. The Director has been elected to serve as a director of the
Corporation and the Corporation desires the Director to continue in such
capacity.
B. In addition to the indemnification to which the Director is
entitled under the Restated Certificate of Incorporation of the Corporation
(the "Charter") and the Bylaws of the Corporation (the "Bylaws"), the
Corporation at its sole expense maintains insurance protecting its officers
and directors against certain losses arising out of actual or threatened
actions, suits or proceedings to which such persons may be made or threatened
to be made parties ("D & O Insurance"). However, the Corporation and the
Director cannot be sure that insurance coverage will continue to be available
in the future or, if available, that it will not be unreasonably expensive to
purchase and maintain.
C. The Charter, the Bylaws and the Delaware General Corporation Law
specifically provide that they are not exclusive, and thereby contemplate that
contracts may be entered into between the Corporation and the members of its
Board of Directors with respect to indemnification of such directors.
Agreement
In order to induce the Director to continue to serve in the
Director's capacity as a director and in consideration of the Director's
valuable services for the Corporation, the Corporation and the Director agree
as follows:
1. Continued Service. The Director will continue to serve at the
will of the Corporation, or in accordance with separate contract to the extent
that such a contract is in effect at the time in question, as a director of
the Corporation so long as the Director is duly elected and qualified in
accordance with the Charter and the Bylaws or until the Director resigns in
accordance with applicable law.
2. Indemnity of Director. The Corporation shall hold harmless
and indemnify the Director to the fullest extent authorized or permitted by
the provisions of the Delaware General Corporation Law or by any amendment
thereof or other statutory provisions authorizing or permitting such
indemnification which is adopted after the date hereof.
3. Maintenance of Insurance and Self Insurance.
(a) Subject only to the provisions of Section 3(b) hereof, so long
as the Director shall continue to serve as a director of the Corporation (or
shall continue at the request of the Corporation to serve as a director of
another corporation, partnership, joint venture, trust or other enterprise)
and thereafter so long as the Director shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that the
Director was a director of the Corporation or served in any of said other
capacities, the Corporation will purchase and maintain in effect for the
benefit of the Director one or more valid, binding and enforceable policies of
D & O Insurance providing, in all respects, coverage at least comparable to
that presently provided.
(b) The Corporation shall not be required to maintain said policies
of D & O Insurance in effect if said 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 substantially
disproportionate to the amount of coverage or (ii) the coverage provided by
such insurance is so limited by exclusions that there is insufficient benefit
from such insurance.
(c) In the event the Corporation does not purchase and maintain in
effect said policies of D & O Insurance pursuant to the provisions of Section
3(b) hereof, the Corporation shall hold harmless and indemnify the Director to
the full extent of the coverage which would otherwise have been provided for
the benefit of the Director pursuant to such D & O Insurance.
4. Additional Indemnity. Subject only to the exclusions set
forth in Section 5 hereof, and without limiting any right which the Director
may have now or in the future pursuant to the Delaware General Corporation
Law, the Charter, the Bylaws, any other agreement, any resolution, any policy
of insurance or otherwise, the Corporation hereby further agrees to hold
harmless and indemnify the Director:
Against any and all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by the
Director in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative,
whether by third parties or by or in the right of the Corporation to which the
Director at any time becomes a party, or is threatened to be made a party, by
reason of the fact that the Director is or was a director of the Corporation,
or is or was serving or at any time serves at the request of the Corporation
as a director of another corporation, partnership, joint venture, trust or
other enterprise.
5. Limitations on Additional Indemnity. No indemnity pursuant to
Section 4 hereof shall be paid by the Corporation:
(a) for which and to the extent that payment is actually made to
the Director under a valid and collectible insurance policy;
(b) for which and to the extent that the Director is indemnified or
receives a recovery otherwise than pursuant to Section 4;
(c) on account of any suit in which judgment is rendered against
the Director for an accounting of profits made from the purchase or sale by
the Director of securities of the Corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law;
(d) with respect to acts or omissions which are not in good faith
or which constitute intentional misconduct or a knowing violation of law;
(e) with respect to authorization by the Director of the unlawful
payment of a dividend or other distribution on the Corporation's capital stock
or the unlawful purchase of its capital stock;
(f) with respect to any transaction from which the Director derived
an improper personal benefit; or
(g) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
6. Notification and Defense of Claim. Promptly after receipt by
the Director of notice of the commencement of any action, suit or proceeding,
the Director will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof; but the omission so to notify the Corporation will not relieve it
from any liability which it may have to the Director otherwise than under this
Agreement or from any liability which is not directly related to the failure
of the Director promptly to so notify the Corporation. With respect to any
such action, suit or proceeding as to which the Director notifies the
Corporation of the commencement thereof:
(a) The Corporation will be entitled to participate therein at its
own expense; and,
(b) Except as otherwise provided below, to the extent that it may
wish, the Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel
satisfactory to the Director. After notice from the Corporation to the
Director of its election so to assume the defense thereof, the Corporation
will not be liable to the Director under this Agreement for any legal or other
expenses subsequently incurred by the Director in connection with the defense
thereof other than reasonable costs of investigation or as otherwise provided
below. The Director shall have the right to employ the Director's counsel in
such action, suit or proceeding, but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the defense
thereof shall be at the expense of the Director unless (i) the employment of
counsel by the Director has been authorized by the Corporation (ii) the
Director shall have reasonably concluded that there may be a conflict of
interest between the Corporation and the Director in the conduct of the
defense of such action or (iii) the Corporation shall not in fact have
employed counsel to assume the defense of such action, in each of which cases
the fees and expenses of counsel shall be at the expense of the Corporation.
The Corporation shall not be entitled to continue the defense of any action,
suit or proceeding properly brought by or on behalf of the Corporation or as
to which the Director shall have made the conclusion provided for in (ii)
above.
(c) The Corporation shall not be required to indemnify the Director
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Corporation shall not settle any
action or claim in any manner which would impose any penalty or limitation on
the Director without the Director's written consent. Neither the Corporation
nor the Director will unreasonably withhold its or his or her consent to any
proposed settlement.
7. Advance Payments.
(a) The Director shall be entitled to receive advance payments in
the amount of all costs, charges, and expenses, including attorney and other
fees and expenses, actually and reasonably incurred or reasonably to be
incurred by the Director in defense of any action, suit or proceeding as
described in Section 4 hereof.
(b) The Director agrees that the Director will reimburse the
Corporation for all costs, charges and reasonable expenses paid or advanced by
the Corporation in defending any civil, criminal, administrative or
investigative action, suit or proceeding against the Director in the event and
only to the extent that it shall be determined by a court in a final
adjudication from which there is no further right of appeal that the Director
is not entitled to be indemnified by the Corporation for such costs, charges
and expenses under the provisions of this Agreement.
8. Indemnification Request.
1. Advancement.
(a) The Director shall in order to request advanced payments
according to Section 7 hereof, submit to the Board of Directors a sworn
statement of request for advancement of expenses in the form of Exhibit 1
attached hereto and made a part hereof (the "Advancement Request"), stating
that (i) the Director has incurred or will incur actual expenses in defending
an action, suit, or proceeding as described in Section 4 hereof and (ii) the
Director undertakes to repay such amount if it shall be determined by a court
in a final adjudication from which there is no further right of appeal that
the Director is not entitled to be indemnified by the Corporation under this
Agreement.
(b) Upon receipt of the Advancement Request the Chairman of the
Board, the President or any Vice President shall authorize immediate payment
of the expenses stated in the Advancement Request within 10 calendar days,
whereupon such payments shall immediately be made by the Corporation. No
security shall be required in connection with any Advancement Request and it
shall be accepted without reference to the Director's ability to make
repayment.
2. Indemnification.
(a) The Director, in order to request indemnification pursuant to
Section 4 hereof, shall submit to the Board of Directors a sworn statement of
request for indemnification in the form of Exhibit 2 attached hereto and made
a part hereof (the "Indemnification Request") stating that the Director is
entitled to indemnification under this Agreement. Such Indemnification
Request shall contain a summary of the action, suit or proceeding and an
itemized list of all payments made or to be made with respect to which
indemnification is requested.
(b) The Board of Directors shall be deemed to have determined that
the Director is entitled to such indemnification unless, within 30 days
after submission of the Indemnification Request, the Board of Directors shall
have notified the Director in writing that it has determined, by a majority
vote of directors who were not parties to such action, suit or proceeding
("Disinterested Directors"), based upon clear and convincing evidence, that
the Director is not entitled to indemnification under this Agreement. The
evidence shall be disclosed to the Director in such notice which shall be
sworn to by all directors who participated in the determination and voted to
deny indemnification.
(c) In the event that (i) there are not sufficient Disinterested
Directors to cast a majority vote or (ii) there is a Change in Control (as
defined in The Dial Corporation 1996 Stock Incentive Plan) of the Corporation
(other than a Change in Control which has been approved by members of the
Board of Directors who were directors prior to such Change in Control), the
following procedure shall take place:
(aa) The Director shall choose subject to Corporation approval (which
approval shall not be unreasonably withheld) counsel who has not performed any
services for the Corporation or the Director within the last five years and
who is in good standing ("Independent Legal Counsel").
(bb) Independent Legal Counsel shall then determine within (i) thirty
(30) days after submission of the Indemnification Request, or (ii) thirty (30)
days after the appointment of the Independent Counsel to act as such, or (iii)
such reasonable time as is required under the circumstances, whichever comes
latest, whether the Director is entitled to indemnification under this
Agreement. Indemnification may only be denied according to Section 5 hereof
and only based upon clear and convincing evidence. In the case of a denial,
Independent Legal Counsel shall submit to the Board of Directors and to the
Director within 10 days after the decision a written opinion disclosing the
grounds and the evidence upon which such decision was based. The decision of
Independent Legal Counsel shall be final.
(d) The termination of any action, suit or proceeding by judgment,
order, settlement or conviction, or upon a plea of no contest or its
equivalent, shall not, of itself, create a presumption that the Director's
conduct was such that indemnity is not available pursuant to Section 5.
9. Continuation of Indemnity. All agreements and obligations of
the Corporation contained herein shall continue during the period the Director
is a director of the Corporation (including service at the request of the
Corporation as a director of another corporation, partnership, joint venture,
trust or other enterprise) and shall continue thereafter so long as the
Director shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that the Director was a director of
the Corporation or serving in any other capacity referred to herein.
10. Enforcement.
(a) The Corporation expressly confirms and agrees that it has
entered into this Agreement and assumes the obligations imposed on the
Corporation hereby in order to induce the Director to serve or continue to
serve as a director of the Corporation, and acknowledges that the Director is
relying upon this Agreement in continuing in such capacity.
(b) In the event the Director is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is successful
in such action, the Corporation shall reimburse the Director for all of the
Director's reasonable fees and expenses in bringing and pursuing such action.
11. Severability. If any provision of this Agreement or the
application of any provision hereof to any person or circumstance is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision to other persons or circumstances shall
not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal shall be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid and legal.
12. Governing Law; Binding Effect; Amendment and Termination.
(a) This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Delaware.
(b) This Agreement shall be binding upon the Director and upon the
Corporation, its successors and assigns (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law), and shall inure to the benefit of the Director, the
Director's heirs, personal representatives and assigns and to the benefit of
the Corporation, its successors and assigns.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.
13. Consent to Jurisdiction. The Corporation and the Director
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 which
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.
14. Rights Not Exclusive. The rights provided hereunder shall
not be deemed exclusive of any other rights to which the Director may be
entitled under any bylaw, agreement, vote of stockholders or of disinterested
directors or otherwise, both as to action in his official capacity and as to
action in any other capacity by holding such office, and shall continue after
the Director ceases to serve the Corporation as a member of the Corporation's
Board of Directors.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
THE DIAL CORPORATION
By
Name:
Title:
Director
Exhibit 1
Advancement Request
State of )
)
County of )
I,, being first duly sworn, do depose and say as follows:
1. This Advancement Request is submitted pursuant to the
Indemnification Agreement, dated as of August 15, 1996 ("Indemnification
Agreement"), between The Dial Corporation (the "Corporation"), a Delaware
corporation, and the undersigned.
2. I am requesting advancement of certain costs, charges and
expenses which I have incurred or will incur in defending a civil, criminal,
administrative or investigative action, suit, proceeding or claim as described
below.
3. I hereby undertake to repay amounts advanced by the Corporation
if it shall be determined by a court in a final adjudication from which there
is no further right of appeal that I am not entitled to be indemnified by the
Corporation under the aforesaid Indemnification Agreement.
4. The costs, charges and expenses for which advance is requested
have been or will be incurred as follows (summarize proceeding and itemize
expenses):
Director
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this day of, 19.
(Seal)
My commission expires the day of, 19.
Exhibit 2
Indemnification Request
State of )
)
County of )
I,, being first duly sworn, do depose and say as follows:
1. This Indemnification Request is submitted pursuant to the
Indemnification Agreement, dated August 15, 1996 ("Indemnification
Agreement"), between The Dial Corporation (the "Corporation"), a Delaware
corporation, and the undersigned.
2. I am requesting indemnification against charges, costs, expenses
(including attorneys' fees and expenses), judgments, fines and amounts paid in
settlement, all of which (collectively, "Liabilities") have been incurred by
me in connection with any action, suit, proceeding or claim to which I was a
party.
3. With respect to all matters related to such action, suit,
proceeding or claim, I am entitled to be indemnified pursuant to the aforesaid
Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Liabilities which have arisen as follows
(describe proceedings and itemize Liabilities):
Director
Subscribed and sworn to before me, a Notary Public in and for said
County and State, this day of, 19.
(Seal)
My commission expires the day of, 19.