Indemnity Agreement - TMP Worldwide Inc.
INDEMNITY AGREEMENT
This INDEMNITY AGREEMENT made and entered into as of ____________,
____, by and between TMP Worldwide Inc., a Delaware corporation (the "Company"),
and ________________ (the "Indemnitee");
WHEREAS, highly competent persons are becoming more reluctant to serve
or to continue serving corporations as directors, officers, employees, agents or
in other capacities unless they are provided with adequate protection through
insurance and indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on behalf of such
corporations; and
WHEREAS, the current difficulties of obtaining adequate insurance have
increased the difficulty of attracting and retaining such persons; and
WHEREAS, the Board of Directors of the Company has determined that the
inability to attract and retain such persons is detrimental to the best
interests of the Company's stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection in
the future; and
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and
WHEREAS, the Indemnitee is willing to serve, continue to serve and
take on additional service for or on behalf of the Company on the condition that
the Indemnitee be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and the Indemnitee do hereby covenant and agree as
follows:
SECTION 1. INDEMNIFICATION. The Company shall indemnify the
Indemnitee to the fullest extent permitted by applicable law in effect on the
date hereof or as such laws may from time to time be amended. Without
diminishing the scope of the indemnification provided by this Section 1, the
rights of indemnification of the Indemnitee provided hereunder shall include but
shall not be limited to those rights hereinafter set forth, except that no
indemnification shall be paid to the Indemnitee:
(a) on account of any suit in which judgment is rendered against
the Indemnitee for an accounting of profits made from the purchase or
sale by the Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934, as
amended from time to time, or similar provisions of any federal, state
or local statutory law;
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(b) on account of the Indemnitee's conduct which is finally
adjudged to have been knowingly fraudulent or deliberately dishonest,
or to constitute willful misconduct;
(c) to the extent expressly prohibited by applicable law;
(d) for which payment is actually made to the Indemnitee under a
valid and collectible insurance policy or under a valid and
enforceable indemnity clause, bylaw or agreement, except in respect of
any excess beyond payment under such insurance, clause, bylaw or
agreement;
(e) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful (and,
in this respect, both the Company and the Indemnitee have been advised
that the Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal securities
laws is against public policy and is, therefore, unenforceable and
that claims for indemnification should be submitted to the appropriate
court for adjudication); or
(f) in connection with any proceeding (or part thereof)
initiated by the Indemnitee, or any proceeding by the Indemnitee
against the Company or its directors, officers, employees or other
indemnitees, unless (i) such indemnification is expressly required to
be made by law, (ii) the proceeding was authorized by the Board of
Directors of the Company, (iii) such indemnification is provided by
the Company, in its sole discretion, pursuant to the powers vested in
the Company under applicable law, or (iv) except as provided in
Sections 11 and 12 hereof.
SECTION 2. ACTION OR PROCEEDING OTHER THAN AN ACTION BY OR IN THE
RIGHT OF THE COMPANY. The Indemnitee shall be entitled to the indemnification
rights provided in this Section if the Indemnitee is 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 in nature,
other than an action by or in the right of the Company, by reason of the fact
that the Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or is or was serving at the request of the Company as a
director, officer, employee, agent or fiduciary of any other entity or
enterprise, including, but not limited to, another corporation, partnership,
joint venture or trust, or by reason of anything done or not done by the
Indemnitee in any such capacity. Pursuant to this Section, the Indemnitee shall
be indemnified against all expenses (including attorneys' fees), costs,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by the Indemnitee in connection with such action, suit or
proceeding (including, but not limited to, the investigation, defense or appeal
thereof), if the Indemnitee acted in good faith and in a manner the 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 the Indemnitee's conduct was unlawful.
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SECTION 3. ACTIONS BY OR IN THE RIGHT OF THE COMPANY. The Indemnitee
shall be entitled to the indemnification rights provided in this Section if the
Indemnitee is a person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding brought by or
in the right of the Company to procure a judgment in its favor by reason of the
fact that the Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the Company as
a director, officer, employee, agent or fiduciary of another entity or
enterprise, including, but not limited to, another corporation, partnership,
joint venture or trust, or by reason of anything done or not done by the
Indemnitee in any such capacity. Pursuant to this Section, the Indemnitee shall
be indemnified against all expenses (including attorneys' fees), costs and
amounts paid in settlement actually and reasonably incurred by the Indemnitee in
connection with such action, suit or proceeding (including, but not limited to,
the investigation, defense or appeal thereof) if the Indemnitee acted in good
faith and in a manner the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company; provided, however, that no such
indemnification shall be made in respect of any claim, issue, or matter as to
which applicable law expressly prohibits such indemnification by reason of any
adjudication of liability of the Indemnitee 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 the circumstances of
the case, the Indemnitee is fairly and reasonably entitled to indemnity for such
expenses, costs and amounts paid in settlement which such court shall deem
proper.
SECTION 4. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF
SUCCESSFUL PARTY. Notwithstanding the other provisions of this Agreement, to
the extent that the Indemnitee has served as a witness on behalf of the Company
or has been successful, on the merits or otherwise, in defense of any action,
suit or proceeding referred to in Sections 2 and 3 hereof, or in defense of any
claim, issue or matter therein, including, without limitation, the dismissal of
any action without prejudice, the Indemnitee shall be indemnified against all
costs, charges and expenses (including attorneys' fees) actually and reasonably
incurred by the Indemnitee in connection therewith.
SECTION 5. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for some
or a portion of the expenses (including attorneys' fees), costs, judgments,
fines and amounts paid in settlement actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense, appeal or settlement
of such suit, action, investigation or proceeding described in Section 2 or 3
hereof, but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), costs, judgments, penalties, fines and amounts paid
in settlement actually and reasonably incurred by the Indemnitee to which the
Indemnitee is entitled.
SECTION 6. DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. Upon
written request by the Indemnitee for indemnification pursuant to Section 2 or 3
hereof, the entitlement of the Indemnitee to indemnification pursuant to the
terms of this Agreement shall be determined by the following person or persons
who shall be empowered to make such determination: (a) by a majority vote of
Disinterested Directors (as defined in Section 17 below), even though less
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than an quorum; (b) if there are no Disinterested Directors, or if the Board of
Directors by the majority vote of Disinterested Directors so directs, by
Independent Counsel (as defined in Section 17 below) in a written opinion to the
Board of Directors, a copy of which shall be delivered to the Indemnitee, or (c)
by the stockholders. Such Independent Counsel shall be selected by the Board of
Directors and shall be subject to the approval of the Indemnitee, whose approval
shall not be unreasonably withheld. Upon failure of the Board to so select such
Independent Counsel or upon failure of the Indemnitee to so approve, such
Independent Counsel shall be selected by the Chancellor of the State of Delaware
or such other person as the Chancellor shall designate to make such selection.
Such determination of entitlement to indemnification shall be made not later
than 45 days after receipt by the Company of a written request for
indemnification. Such request shall include documentation or information which
is necessary for such determination and which is reasonably available to the
Indemnitee. Any costs or expenses (including attorneys' fees) incurred by the
Indemnitee in connection with the Indemnitee's request for indemnification
hereunder shall be borne by the Company. The Company hereby indemnifies and
agrees to hold the Indemnitee harmless therefrom irrespective of the outcome of
the determination of the Indemnitee's entitlement to indemnification. If the
person making such determination shall determine that the Indemnitee is entitled
to indemnification as part (but not all) of the application for indemnification,
such person shall reasonably prorate such partial indemnification among such
claims, issues or matters.
SECTION 7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. The
Secretary of the Company shall, promptly upon receipt of the Indemnitee's
request for indemnification, advise in writing the Board of Directors or such
other person or persons empowered to make the determination as provided in
Section 6 that the Indemnitee has made such request for indemnification. Upon
making such request for indemnification, the Indemnitee shall be presumed to be
entitled to indemnification hereunder and the Company shall have the burden of
proof in the making of any determination contrary to such presumption. If the
person or persons so empowered to make such determination shall have failed to
make the requested indemnification within 45 days after receipt by the Company
of such request, the requisite determination of entitlement to indemnification
shall be deemed to have been made and the Indemnitee shall be absolutely
entitled to such indemnification, absent actual and material fraud in the
request for indemnification. The termination of any action, suit, investigation
or proceeding described in Section 2 or 3 hereof by judgment, order, settlement
or conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not,
of itself: (a) create a presumption that the Indemnitee did not act in good
faith and in a manner which the 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, that the Indemnitee had reasonable cause to believe that
the Indemnitee's conduct was unlawful; or (b) otherwise adversely affect the
rights of the Indemnitee to indemnification except as may be provided herein.
SECTION 8. ADVANCEMENT OF EXPENSES AND COSTS. All reasonable expenses
and costs incurred by the Indemnitee (including attorneys' fees, retainers and
advances of disbursements required of the Indemnitee) shall be paid by the
Company in advance of the final disposition of such action, suit or proceeding
at the request of the Indemnitee within twenty days after the receipt by the
Company of a statement or statements from the Indemnitee requesting such advance
or advances from time to time. The Indemnitee's entitlement to such expenses
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shall include those incurred in connection with any proceeding by the Indemnitee
seeking an adjudication or award in arbitration pursuant to this Agreement.
Such statement or statements shall reasonably evidence the expenses and costs
incurred by the Indemnitee in connection therewith and shall include or be
accompanied by an undertaking by or on behalf of the Indemnitee to repay such
amount if it is ultimately determined that the Indemnitee is not entitled to be
indemnified against such expenses and costs by the Company as provided by this
Agreement or otherwise.
SECTION 9. REMEDIES OF THE INDEMNITEE IN CASES OF DETERMINATION NOT
TO INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made
that the Indemnitee is not entitled to indemnification hereunder or if payment
has not been timely made following a determination of entitlement to
indemnification pursuant to Sections 6 and 7, or if expenses are not advanced
pursuant to Section 8, the Indemnitee shall be entitled to a final adjudication
in an appropriate court of the State of Delaware or any other court of competent
jurisdiction of the Indemnitee's entitlement to such indemnification or advance.
Alternatively, the Indemnitee at the Indemnitee's option may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association, such award to be made within sixty days
following the filing of the demand for arbitration. The Company shall not
oppose the Indemnitee's right to seek any such adjudication or award in
arbitration or any other claim. Such judicial proceeding or arbitration shall be
made DE NOVO and the Indemnitee shall not be prejudiced by reason of a
determination (if so made) that the Indemnitee is not entitled to
indemnification. If a determination is made or deemed to have been made
pursuant to the terms of Section 6 or Section 7 hereof that the Indemnitee is
entitled to indemnification, the Company shall be bound by such determination
and is precluded from asserting that such determination has not been made or
that the procedure by which such determination was made is not valid, binding
and enforceable. The Company further agrees to stipulate in any such court or
before any such arbitrator that the Company is bound by all the provisions of
this Agreement and is precluded from making any assertions to the contrary. If
the court or arbitrator shall determine that the Indemnitee is entitled to any
indemnification hereunder, the Company shall pay all reasonable expenses
(including attorneys' fees) and costs actually incurred by the Indemnitee in
connection with such adjudication or award in arbitration (including, but not
limited to, any appellant proceedings).
SECTION 10. NOTIFICATION AND DEFENSE OF CLAIM. Promptly after
receipt by the Indemnitee of notice of the commencement of any action, suit or
proceeding, the Indemnitee will, if a claim in respect thereof is to be made
against the Company under this Agreement, notify the Company in writing of the
commencement thereof; but the omission to so notify the Company will not relieve
it from any liability that it may have to the Indemnitee otherwise than under
this Agreement. Notwithstanding any other provision of this Agreement, with
respect to any such action, suit or proceeding as to which the Indemnitee
notifies the Company of the commencement thereof:
(a) The Company will be entitled to participate therein at its
own expense; and
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(b) Except as otherwise provided in this Section 10(b), to the
extent that it may wish, the Company, jointly with any other
indemnifying party similarly notified, shall be entitled to assume the
defense thereof, with counsel satisfactory to the Indemnitee. After
notice from the Company to the Indemnitee of its election to so assume
the defense thereof, the Company shall not be liable to the Indemnitee
under this Agreement for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof
other than reasonable costs of investigation or as otherwise provided
below. The Indemnitee shall have the right to employ the Indemnitee's
own counsel in such action, suit or proceeding, but the fees and
expense of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of the
Indemnitee unless (i) the employment of counsel by the Indemnitee has
been authorized by the Company, (ii) the Indemnitee shall have
reasonably concluded that there may be a conflict of interest between
the Company and the Indemnitee in the conduct of the defense of such
action or (iii) the Company shall not in fact have employed counsel to
assume the defense of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the Company. The
Company shall not be entitled to assume the defense of any action,
suit or proceeding brought by or on behalf of the Company or as to
which the Indemnitee shall have made the conclusion provided for in
(ii) above.
(c) The Company shall not be liable to indemnify the Indemnitee
under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Company shall not
settle any action or claim in any manner that would impose any penalty
or limitation on the Indemnitee without the Indemnitee's written
consent. Neither the Company nor the Indemnitee will unreasonably
withhold their consent to any proposed settlement.
SECTION 11. OTHER RIGHTS TO INDEMNIFICATION. The indemnification and
advancement of expenses (including attorneys' fees) and costs provided by this
Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may now or in the future be entitled under any provision of the
bylaws or Certificate of Incorporation of the Company, any agreement, any vote
of stockholders or Disinterested Directors, any provision of law or otherwise.
SECTION 12. ATTORNEYS' FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT.
In the event that the Indemnitee is subject to or intervenes in any proceeding
in which the validity or enforceability of this Agreement is at issue or seeks
an adjudication or award in arbitration to enforce the Indemnitee's rights
under, or to recover damages for breach of, this Agreement, the Indemnitee, if
the Indemnitee prevails in whole or in part in such action, shall be entitled to
recover from the Company and shall be indemnified by the Company against any
actual expenses for attorneys' fees and disbursements reasonably incurred by the
Indemnitee.
SECTION 13. DURATION OF AGREEMENT. This Agreement shall continue
until and terminate upon the later of: (a) ten years after the Indemnitee has
ceased to occupy any of the positions or have any relationships described in
Sections 2 and 3 of this Agreement; and (b) the
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final termination of all pending or threatened actions, suits, proceedings or
investigations to which the Indemnitee may be subject by reason of the fact that
the Indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company or is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary of any other entity or enterprise,
including, but not limited to, another corporation, partnership, joint venture
or trust, or by reason of anything done or not done by the Indemnitee in any
such capacity. The indemnification provided under this Agreement shall continue
as to the Indemnitee even though the Indemnitee may have ceased to be a
director, officer, employee, agent or fiduciary of the Company. This Agreement
shall be binding upon the Company and its successors and assigns and shall inure
to the benefit of the Indemnitee and the Indemnitee's spouse, assigns, heirs,
devises, executors, administrators or other legal representatives. Nothing in
this Agreement shall confer upon the Indemnitee the right to continue in the
employ of the Company or affect the right of the Company to terminate the
Indemnitee's employment at any time in the sole discretion of the Company, with
or without cause.
SECTION 14. SEVERABILITY. If any provision or provisions of this
Agreement shall be held invalid, illegal or unenforceable for any reason
whatsoever, (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby, and (b) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraph of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifest by the provision held invalid, illegal or
unenforceable.
SECTION 15. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall 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 16. HEADINGS. The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
SECTION 17. DEFINITIONS. For purposes of this Agreement:
(a) "Disinterested Director" shall mean a director of the
Company who is not or was not a party to the action, suit,
investigation or proceeding in respect of which indemnification is
being sought by the Indemnitee.
(b) "Independent Counsel" shall mean a law firm or a member of a
law firm that neither is presently nor in the past five years has been
retained to represent: (i) the Company or the Indemnitee in any
matter material to either such party, or (ii) any other party to the
action, suit, investigation or proceeding
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giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term "Independent Counsel" shall not include any
person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing
either the Company or the Indemnitee in an action to determine the
Indemnitee's right to indemnification under this Agreement.
SECTION 18. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
SECTION 19. NOTICES. All notices, requests, demands or other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand, courier, or personally, on the date of
delivery, or (ii) if mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:
(a) If to the Indemnitee, to:
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(b) If to the Company, to:
TMP Worldwide Inc.
1633 Broadway, 33rd Floor
New York, NY 10019
Attention: Andrew J. McKelvey
with a copy to:
TMP Worldwide Inc.
1633 Broadway, 33rd Floor
New York, NY 10019
Attention: Myron F. Olesnyckyj, Esq.
or to such other address as may be furnished to the Indemnitee by the Company or
to the Company by the Indemnitee, as the case may be.
SECTION 20. GOVERNING LAW. The parties hereto agree that this
Agreement shall be governed by, construed and enforced in accordance with, the
laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
TMP WORLDWIDE INC.
By:
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Name:
Title:
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Indemnitee
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