Document/Exhibit Description Pages Size
1: 10-K 1993 Form 10-K 29± 164K
5: EX-10 Amended Complaint Filed December 1, 1993 46± 171K
4: EX-10 Forms of Non-Qualified Stock Option Agreements 10± 40K
3: EX-10 Indemnification Agreements 18± 91K
6: EX-10 Investor Relations Letter Agreement Dated 1/6/94 1 9K
7: EX-10 Investor Relations Letter Agreement Dated 12/20/93 1 9K
9: EX-10 Letter Agreement Dated December 4, 1992 1 9K
8: EX-10 Letter Agreement Dated May 28, 1992 2± 9K
2: EX-10 Third Amendment to Agreement With Citibank 4± 19K
10: EX-11 Computation of Earnings Per Share 2 9K
11: EX-13 1993 Annual Report 28± 127K
12: EX-15 Consent of Independent Accountants 1 7K
13: EX-22 Subsidiaries 1 5K
EXHIBIT 10(ai)
INDEMNITY AGREEMENT
-------------------
AGREEMENT, as of February 11, 1993 (the "Agreement"), between
SafeCard Services, Inc., a Delaware corporation (the "Company"),
and Eugene Miller (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or an officer of the
Company;
WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against
directors and officers of public companies in today's environment;
WHEREAS, the By-laws (the "By-laws") and Certificate of
Incorporation (the "Certificate") of the Company require the
Company to indemnify and advance expenses to its directors and
officers to the fullest extent permitted by law, and the Indemnitee
has been serving and continues to serve as a director and/or an
officer of the Company in part in reliance on such provisions in
the By-laws and Certificate;
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance
Indemnitee's continued service to the Company in an effective
manner and Indemnitee's reliance on the foregoing provisions in the
By-laws and Certificate, and in part to provide Indemnitee with
specific contractual assurance that the protection promised by such
provisions in the By-laws and Certificate will be available to
Indemnitee (regardless of, among other things, any amendment to or
revocation of such provisions in the By-laws or Certificate or any
change in the composition of the Company's Board of Directors (the
"Board") or acquisition transaction relating to the Company), the
Company wishes to provide in this Agreement for the indemnification
of and the advancing of expenses to Indemnitee to the fullest
extent permitted by law and as set forth in this Agreement, and, to
the extent insurance is maintained, for the continued coverage of
Indemnitee under Company directors' and officers' liability
insurance policies;
NOW, THEREFORE, in consideration of the premises and of
Indemnitee continuing to serve the Company directly or, at its
request, with another enterprise, and intending to be legally bound
hereby, the parties hereto agree as follows;
1. Certain Definitions:
(a) Change in Control: shall be deemed to have occurred
upon any of the following events:
(i) The acquisition in one or more transactions by any
"Person" (as the term person is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) of "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of twenty-five percent (25%)
or more of the combined voting power of the Company's then
outstanding voting securities (the "Voting Securities"), provided,
however, that for purposes of this Section 1(a)(i), the Voting
Securities acquired directly from the Company by any Person shall
be excluded from the determination of such Person's Beneficial
Ownership of Voting Securities (but such Voting Securities shall
be included in the calculation of the total number of Voting
Securities then outstanding); or
(ii) The individuals who, as of February 11, 1993, are
members of the Board (the "Incumbent Board"), cease for any reason
to constitute at least two-thirds of the Board; provided, however,
that if the election, or nomination for election by the Company's
stockholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent Board, such new director shall,
for purposes of this Agreement, be considered as a member
of the Incumbent Board; or
(iii)Approval by stockholders of the Company of (A) a merger
or consolidation involving the Company if the stockholders of the
Company immediately before such merger or consolidation do not own,
directly or indirectly immediately following such merger or
consolidation, more than seventy-five percent (75%) of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the Voting
Securities immediately before such merger or consolidation or (B)
a complete liquidation or dissolution of the Company or an
agreement for the sale or other disposition of all or substantially
all of the assets of the Company.
(iv) Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because twenty-five percent
(25%) or more of the then outstanding Voting Securities is acquired
by (i) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained by the Company or any of its
subsidiaries or (ii) any corporation that, immediately prior to
such acquisition, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their
ownership of stock in the Company immediately prior to such
acquisition.
(v) Moreover, notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a result
of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject
Person, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of
Voting Securities by the Company, and after such share acquisition
by the Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the percentage of
the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
(b) Claim: any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative or other, including, without limitation, an action by
or in the right of any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, whether predicated on
foreign, federal, state or local law and whether formal or
informal.
(c) Expenses: include attorneys' fees and all other costs,
charges and expenses paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence related
to the fact that Indemnitee is or was or has agreed to become a
director, officer, employee, agent or fiduciary of the Company, or
is or was serving or has agreed to serve in any capacity, at the
request of the Company, in any other corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by Indemnitee in any such
capacity.
(e) Potential Change in Control: shall be deemed to have
occurred if (i) the Company enters into an agreement or
arrangement, the consummation of which would result in the
occurrence of a Change in Control; or (ii) the Board adopts a
resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
(f) Voting Securities: any securities of the Company that
vote generally in the election of directors.
2. Basic Indemnification Arrangement:
(a) In the event Indemnitee was, is or becomes a party to
or witness or other participant in, or is threatened to be made a
party to or witness or other participant in, a Claim by reason of
(or arising in part out of) an Indemnifiable Event, the Company
shall indemnify Indemnitee (without regard to the negligence or
other fault of the Indemnitee) to the fullest extent permitted by
applicable law, as soon as practicable but in no event later than
thirty days after written demand is presented to the Company,
against any and all Expenses, judgments, fines, penalties, excise
taxes and amounts paid or to be paid in settlement (including all
interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments, fines,
penalties, excise taxes or amounts paid or to be paid in
settlement) of such Claim. If Indemnitee makes a request to be
indemnified under this Agreement, the Board of Directors (acting by
a quorum consisting of directors who are not parties to the Claim
with respect to an Indemnifiable Event or, if such a quorum is not
obtainable, acting upon an opinion in writing of independent legal
counsel ("Board Action")) shall, as soon as practicable but in no
event later than thirty days after such request, authorize such
indemnification. Notwithstanding anything in the Certificate, the
By-laws or this Agreement to the contrary, following a Change in
Control, Indemnitee shall be entitled to indemnification pursuant
to this Agreement in connection with any Claim initiated by
Indemnitee.
(b) Notwithstanding anything in the Certificate, the By-
laws or this Agreement to the contrary, if so requested by
Indemnitee, the Company shall advance (within two business days of
such request) any and all Expenses relating to a Claim to
Indemnitee (an "Expense Advance"), upon the receipt of a written
undertaking by or on behalf of Indemnitee to repay such Expense
Advance if a judgment or other final adjudication or determination
adverse to Indemnitee establishes that Indemnitee, with respect to
such Claim, is not eligible for indemnification.
(c) If there has been no Board Action or Arbitration (as
defined in Section 3), or if Board Action determines that
Indemnitee would not be permitted to be indemnified, in any
respect, in whole or in part, in accordance with Section 2(a) of
this Agreement, Indemnitee shall have the right to commence
litigation in the court that is hearing the action or proceeding
relating to the Claim for which indemnification is sought or in any
court in the States of Delaware or Florida having subject matter
jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any Board Action
or any aspect thereof, and the Company hereby consents to service
of process and to appear in any such proceeding. Notwithstanding
anything in the Certificate, the By-laws or this Agreement to the
contrary, if Indemnitee has commenced legal proceedings in a court
of competent jurisdiction or Arbitration to secure a determination
that Indemnitee should be indemnified under this Agreement, the By-
laws of the Company or applicable law, any Board Action that
Indemnitee would not be permitted to be indemnified in accordance
with Section 2(a) of this Agreement shall not be binding. Any
Board Action not followed by such litigation or Arbitration shall
be conclusive and binding on the Company and Indemnitee.
3. Change in Control. The Company agrees that if there is a
Change in Control, Indemnitee, by giving written notice to the
Company and the American Arbitration Association (the "Notice"),
may require that any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled
by arbitration (the "Arbitration") in Fort Lauderdale, Florida in
accordance with the Rules of the American Arbitration Association
(the "Rules"). The Arbitration shall be conducted by a panel of
three arbitrators selected in accordance with the Rules within
thirty days of delivery of the Notice. The decision of the panel
shall be made as soon as practicable after the panel has been
selected, and the parties agree to use their reasonable efforts to
cause the panel to deliver its decision within ninety days of its
selection. The Company shall pay all fees and expenses of the
Arbitration. The Arbitration shall be conclusive and binding on
the Company and Indemnitee and the Company or Indemnitee may cause
judgment upon the award rendered by the arbitrators to be entered
in any court having jurisdiction thereof.
4. Establishment of Trust. In the event of a Potential Change
in Control or a Change in Control, the Company shall, promptly upon
written request by Indemnitee, create a Trust for the benefit of
Indemnitee and from time to time, upon written request of
Indemnitee to the Company, shall fund such Trust in an amount, as
set forth in such request, sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to
be incurred in connection with investigating, preparing for and
defending any Claim relating to an Indemnifiable Event, and any and
all judgments, fines, penalties and settlement amounts of any and
all Claims relating to an Indemnifiable Event from time to time
actually paid or claimed, reasonably anticipated or proposed to be
paid. The terms of the Trust shall provide that upon a Change in
Control (i) the Trust shall not be revoked or the principal thereof
invaded, without the written consent of Indemnitee; (ii) the
Trustee shall advance, within two business days of a request by
Indemnitee, any and all Expenses to Indemnitee, not advanced
directly by the Company to Indemnitee (and Indemnitee hereby agrees
to reimburse the Trust under the circumstances under which
Indemnitee would be required to reimburse the Company under Section
2(b) of this Agreement); (iii) the Trust shall continue to be
funded by the Company in accordance with the funding obligation set
forth above; (iv) the Trustee shall promptly pay to Indemnitee all
amounts for which Indemnitee shall be entitled to indemnification
pursuant to this Agreement or otherwise; and (v) all unexpended
funds in such Trust shall revert to the Company upon a final
determination by Board Action or Arbitration or a court of
competent jurisdiction, as the case may be, that Indemnitee has
been fully indemnified under the terms of this Agreement. The
Trustee shall be chosen by Indemnitee. Nothing in this Section 4
shall relieve the Company of any of its obligations under this
Agreement.
5. Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all expenses (including
attorneys' fees) and, if requested by Indemnitee, shall (within two
business days of such request) advance such expenses to Indemnitee,
which are incurred by Indemnitee in connection with any claim
asserted by or action brought by Indemnitee for (i) indemnification
or advance payment of Expenses by the Company under law, this
Agreement, or any other agreement or By-law of the Company now or
hereafter in effect relating to Claims for Indemnifiable Events
and/or (ii) recovery under any directors' and officers' liability
insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as
the case may be.
6. Partial Indemnity, Etc. 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, penalties,
excise taxes and amounts paid or to be paid in settlement of a
Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
including, without limitation, dismissal without prejudice,
Indemnitee shall be indemnified against any and all Expenses,
judgments, fines, penalties, excise taxes and amounts paid or to be
paid in settlement of such Claim. In connection with any
determination by Board Action, Arbitration or a court of competent
jurisdiction that Indemnitee is not entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
7. No Presumption. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment,
order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted
by applicable law or this Agreement.
8. Contribution. In the event that the indemnification
provided for in this Agreement is unavailable to Indemnitee for any
reason whatsoever, the Company, in lieu of indemnifying Indemnitee,
shall 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, in such proportion as is
deemed fair and reasonable in light of all of the circumstances of
such action by Board Action or Arbitration or by the court before
which such action was brought 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 cause to such action; and/or
(ii) the relative fault of the Company (and its other directors,
officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s). Indemnitee's right to
contribution under this Paragraph 8 shall be determined in
accordance with, pursuant to and in the same manner as, the
provisions in Paragraphs 2 and 3 hereof relating to Indemnitee's
right to indemnification under this Agreement.
9. Notice to the Company by Indemnitee. Indemnitee agrees to
notify the Company promptly in writing upon being served with or
having actual knowledge of any citation, summons, compliant,
indictment or any other similar document relating to any action
which may result in a claim of indemnification or contribution
hereunder.
10. Non-exclusivity, Etc. The rights of the Indemnitee
hereunder shall be in addition to any other rights Indemnitee may
have under the Company's Certificate or By-laws or the Delaware
General Corporation Law or otherwise, and nothing herein shall be
deemed to diminish or otherwise restrict Indemnitee's right to
indemnification under any such other provision. To the extent
applicable law or the Certificate of Incorporation or the By-laws
of Company, as in effect on the date hereof or at any time in the
future, permit greater indemnification than as provided for in this
Agreement, the parties hereto agree that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by such law or
provision of the Certificate of Incorporation or By-laws and this
Agreement shall be deemed amended without any further action by the
Company or Indemnitee to grant such greater benefits. Indemnitee
may elect to have Indemnitee's rights hereunder interpreted on the
basis of applicable law in affect at the time of execution of this
Agreement, at the time of the occurrence of the Indemnifiable Event
giving rise to a Claim or at the time indemnification is sought.
11. Liability Insurance.
-------------------
(a) To the extent the Company maintains at any time an
insurance policy or policies providing directors' and officers'
liability insurance, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any other Company director or
officer under such insurance policy. The purchase and maintenance
of such insurance shall not in any way limit or affect the rights
and obligations of the parties hereto, and the execution and
delivery of this Agreement shall not in any way be construed to
limit or affect the rights and obligations of the Company and/or of
the other parties under any such insurance policy.
(b) For seven years after the Indemnitee no longer serves
as a director or officer of the Company, the Company shall continue
to provide directors' and officers' liability coverage for
liabilities of the Indemnitee occurring during his service with the
Company on terms no less favorable in terms of coverage and amount
than such insurance maintained by the Company at the date of the
Indemnitee's separation from the Company. In the event such
coverage is not available, the maximum available coverage shall be
maintained pursuant to this covenant.
12. Period of Limitations. No legal action shall be brought and
no cause of action shall be asserted by or on behalf of the Company
or any affiliate of the Company against Indemnitee, Indemnitee's
spouse, heirs, executors or personal or legal representatives after
the expiration of two years from the date of accrual of such cause
of action, and any claim or cause of action of the Company or its
affiliate shall be extinguished and deemed released unless asserted
by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter
period shall govern.
13. Amendments, Etc. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by
both of the 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.
14. Subrogation. In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to
all of the rights of recovery with respect to such payment of
Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
15. No-Duplication of Payments. The Company shall not be liable
under this Agreement to make any payment in connection with any
claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance policy,
By-law or otherwise) of the amounts otherwise indemnifiable
hereunder.
16. Binding Effect, Etc. This Agreement shall be binding upon
and inure to the benefit of and be enforceable against and by the
parties hereto and their respective successors, assigns (including
any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business and/or
assets of the Company), spouses, heirs and personal and legal
representatives. The Company shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the
business and/or assets of the Company, by written agreement in form
and substance satisfactory to Indemnitee, expressly to assume and
agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in
effect regardless of whether Indemnitee continues to serve as a
director and/or officer of the Company or of any other enterprise
at the Company's request.
17. Severability. The provisions of this Agreement shall be
severable in the event that any of the provisions thereof
(including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted
by law.
18. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given when delivered by hand
or when mailed by certified registered mail, return receipt
requested, with postage prepaid:
A. If to Indemnitee, to:
____________________
____________________
or to such other person or address which Indemnitee shall furnish
to the Company in writing pursuant to the above.
B. If to the Company, to:
SafeCard Services, Inc.
3001 East Pershing Boulevard
Cheyenne, Wyoming 82001
Attention: President or Chief Operating Officer
or to such person or address as the Company shall furnish to
Indemnitee in writing pursuant to the above.
19. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed in such
State without giving effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the 11th day of February, 1993.
SAFECARD SERVICES, INC.
By: /s/ W.M. Stalcup
------------------
Name: W.M. Stalcup
Title: President
INDEMNITEE
----------------------
EXHIBIT 10(ai)
INDEMNITY AGREEMENT
-------------------
AGREEMENT, as of September 1, 1993 (the "Agreement"), between
SafeCard Services, Inc., a Delaware corporation (the "Company"),
and Marshall L. Burman (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is a director and/or an officer of the
Company;
WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against
directors and officers of public companies in today's environment;
WHEREAS, the By-laws (the "By-laws") and Certificate of
Incorporation (the "Certificate") of the Company require the
Company to indemnify its directors and officers to the fullest
extent permitted by law, and the Indemnitee has been serving and
continues to serve as a director and/or an officer of the Company
in part in reliance on such provisions in the By-laws and
Certificate;
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance
Indemnitee's continued service to the Company in an effective
manner and Indemnitee's reliance on the foregoing provisions in the
By-laws and Certificate, and in part to provide Indemnitee with
specific contractual assurance that the protection promised by such
provisions in the By-laws and Certificate will be available to
Indemnitee (regardless of, among other things, any amendment to or
revocation of such provisions in the By-laws or Certificate or any
change in the composition of the Company's Board of Directors (the
"Board") or acquisition transaction relating to the Company), the
Company wishes to provide in this Agreement for the indemnification
of and the advancing of expenses to Indemnitee to the fullest
extent permitted by law and as set forth in this Agreement, and, to
the extent insurance is maintained, for the continued coverage of
Indemnitee under Company directors' and officers' liability
insurance policies;
NOW, THEREFORE, in consideration of the premises and of
Indemnitee continuing to serve the Company directly or, at its
request, with another enterprise, and intending to be legally bound
hereby, the parties hereto agree as follows;
1. Certain Definitions:
(a) Change in Control: shall be deemed to have occurred
upon any of the following events:
(i) The acquisition in one or more transactions by any
"Person" (as the term person is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) of "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of twenty-five percent (25%)
or more of the combined voting power of the Company's then
outstanding voting securities (the "Voting Securities"), provided,
however, that for purposes of this Section 1(a)(i), the Voting
Securities acquired directly from the Company by any Person shall
be excluded from the determination of such Person's Beneficial
Ownership of Voting Securities (but such Voting Securities shall be
included in the calculation of the total number of Voting
Securities then outstanding); or
(ii) The individuals who, as of August 31, 1993, are members
of the Board (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the Board; provided, however,
that if the election, or nomination for election by the Company's
stockholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent Board, such new director shall,
for purposes of this Agreement, be considered as a member of the
Incumbent Board; or
(iii)Approval by stockholders of the Company of (A) a merger
or consolidation involving the Company if the stockholders of the
Company immediately before such merger or consolidation do not own,
directly or indirectly immediately following such merger or
consolidation, more than seventy-five percent (75%) of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the Voting
Securities immediately before such merger or consolidation or (B)
a complete liquidation or dissolution of the Company or an
agreement for the sale or other disposition of all or substantially
all of the assets of the Company.
(iv) Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because twenty-five percent
(25%) or more of the then outstanding Voting Securities is acquired
by (i) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained by the Company or any of its
subsidiaries or (ii) any corporation that, immediately prior to
such acquisition, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their
ownership of stock in the Company immediately prior to such
acquisition.
(v) Moreover, notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a result
of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject
Person, provided that if a Change in Control would occur (but for
the opera-tion of this sentence) as a result of the acquisition of
Voting Securities by the Company, and after such share acquisition
by the Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the percentage of
the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
(b) Claim: any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative or other, including, without limitation, an action by
or in the right of any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, whether predicated on
foreign, federal, state or local law and whether formal or
informal.
(c) Expenses: include attorneys' fees and all other costs,
charges and expenses paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence related
to the fact that Indemnitee is or was or has agreed to become a
director, officer, employee, agent or fiduciary of the Company, or
is or was serving or has agreed to serve in any capacity, at the
request of the Company, in any other corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by Indemnitee in any such
capacity.
(e) Potential Change in Control: shall be deemed to have
occurred if (i) the Company enters into an agreement or
arrangement, the consummation of which would result in the
occurrence of a Change in Control; or (ii) the Board adopts a
resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
(f) Voting Securities: any securities of the Company that
vote generally in the election of directors.
2. Basic Indemnification Arrangement:
(a) In the event Indemnitee was, is or becomes a party to
or witness or other participant in, or is threatened to be made a
party to or witness or other participant in, a Claim by reason of
(or arising in part out of) an Indemnifiable Event, the Company
shall indemnify Indemnitee (without regard to the negligence or
other fault of the Indemnitee) to the fullest extent permitted by
applicable law, as soon as practicable but in no event later than
thirty days after written demand is presented to the Company,
against any and all Expenses, judgments, fines, penalties, excise
taxes and amounts paid or to be paid in settlement (including all
interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments, fines,
penalties, excise taxes or amounts paid or to be paid in
settlement) of such Claim. If Indemnitee makes a request to be
indemnified under this Agreement, the Board of Directors (acting by
a quorum consisting of directors who are not parties to the Claim
with respect to an Indemnifiable Event or, if such a quorum is not
obtainable, acting upon an opinion in writing of independent legal
counsel ("Board Action")) shall, as soon as practicable but in no
event later than thirty days after such request, authorize such
indemnification. Notwithstanding anything in the Certificate, the
By-laws or this Agreement to the contrary, following a Change in
Control, Indemnitee shall be entitled to indemnification pursuant
to this Agreement in connection with any Claim initiated by
Indemnitee.
(b) Notwithstanding anything in the Certificate, the By-
laws or this Agreement to the contrary, if so requested by
Indemnitee, the Company shall advance (within two business days of
such request) any and all Expenses relating to a Claim to
Indemnitee (an "Expense Advance"), upon the receipt of a written
undertaking by or on behalf of Indemnitee to repay such Expense
Advance if a judgment or other final adjudication or determination
adverse to Indemnitee establishes that Indemnitee, with respect to
such Claim, is not eligible for indemnification.
(c) If there has been no Board Action or Arbitration (as
defined in Section 3), or if Board Action determines that
Indemnitee would not be permitted to be indemnified, in any
respect, in whole or in part, in accordance with Section 2(a) of
this Agreement, Indemnitee shall have the right to commence
litigation in the court that is hearing the action or proceeding
relating to the Claim for which indemnification is sought or in any
court in the States of Delaware or Florida having subject matter
jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any Board Action
or any aspect thereof, and the Company hereby consents to service
of process and to appear in any such proceeding. Notwithstanding
anything in the Certificate, the By-laws or this Agreement to the
contrary, if Indemnitee has commenced legal proceedings in a court
of competent jurisdiction or Arbitration to secure a determination
that Indemnitee should be indemnified under this Agreement, the By-
laws of the Company or applicable law, any Board Action that
Indemnitee would not be permitted to be indemnified in accordance
with Section 2(a) of this Agreement shall not be binding. Any
Board Action not followed by such litigation or Arbitration shall
be conclusive and binding on the Company and Indemnitee.
3. Change in Control. The Company agrees that if there is a
Change in Control, Indemnitee, by giving written notice to the
Company and the American Arbitration Association (the "Notice"),
may require that any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled
by arbitration (the "Arbitration") in Fort Lauderdale, Florida in
accordance with the Rules of the American Arbitration Association
(the "Rules"). The Arbitration shall be conducted by a panel of
three arbitrators selected in accordance with the Rules within
thirty days of delivery of the Notice. The decision of the panel
shall be made as soon as practicable after the panel has been
selected, and the parties agree to use their reasonable efforts to
cause the panel to deliver its decision within ninety days of its
selection. The Company shall pay all fees and expenses of the
Arbitration. The Arbitration shall be conclusive and binding on
the Company and Indemnitee and the Company or Indemnitee may cause
judgment upon the award rendered by the arbitrators to be entered
in any court having jurisdiction thereof.
4. Establishment of Trust. In the event of a Potential Change
in Control or a Change in Control, the Company shall, promptly upon
written request by Indemnitee, create a Trust for the benefit of
Indemnitee and from time to time, upon written request of
Indemnitee to the Company, shall fund such Trust in an amount, as
set forth in such request, sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to
be incurred in connection with investigating, preparing for and
defending any Claim relating to an Indemnifiable Event, and any and
all judgments, fines, penalties and settlement amounts of any and
all Claims relating to an Indemnifiable Event from time to time
actually paid or claimed, reasonably anticipated or proposed to be
paid. The terms of the Trust shall provide that upon a Change in
Control (i) the Trust shall not be revoked or the principal thereof
invaded, without the written consent of Indemnitee; (ii) the
Trustee shall advance, within two business days of a request by
Indemnitee, any and all Expenses to Indemnitee, not advanced
directly by the Company to Indemnitee (and Indemnitee hereby agrees
to reimburse the Trust under the circumstances under which
Indemnitee would be required to reimburse the Company under Section
2(b) of this Agreement); (iii) the Trust shall continue to be
funded by the Company in accordance with the funding obligation set
forth above; (iv) the Trust-ee shall promptly pay to Indemnitee all
amounts for which Indemnitee shall be entitled to indemnification
pursuant to this Agreement or otherwise; and (v) all unexpended
funds in such Trust shall revert to the Company upon a final
determination by Board Action or Arbitration or a court of
competent jurisdiction, as the case may be, that Indemnitee has
been fully indemnified under the terms of this Agreement. The
Trustee shall be chosen by Indemnitee. Nothing in this Section 4
shall relieve the Company of any of its obligations under this
Agreement.
5. Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all expenses (including
attorneys' fees) and, if requested by Indemnitee, shall (within two
business days of such request) advance such expenses to Indemnitee,
which are incurred by Indemnitee in connection with any claim
asserted by or action brought by Indemnitee for (i) indemnification
or advance payment of Expenses by the Company under law, this
Agreement, or any other agreement or By-law of the Company now or
hereafter in effect relating to Claims for Indemnifiable Events
and/or (ii) recovery under any directors' and officers' liability
insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as
the case may be.
6. Partial Indemnity, Etc. 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, penalties,
excise taxes and amounts paid or to be paid in settlement of a
Claim but not, however, for all of the total amount thereof, the
Company shall nevertheless indemnify In-demnitee for the portion
thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
including, without limitation, dismissal without prejudice,
Indemnitee shall be indemnified against any and all Expenses,
judgments, fines, penalties, excise taxes and amounts paid or to be
paid in settlement of such Claim. In connection with any
determination by Board Action, Arbitration or a court of competent
jurisdiction that Indemnitee is not entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
7. No Presumption. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment,
order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted
by applicable law or this Agreement.
8. Contribution. In the event that the indemnification
provided for in this Agreement is unavailable to Indemnitee for any
reason whatsoever, the Company, in lieu of indemnifying Indemnitee,
shall 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, in such proportion as is
deemed fair and reasonable in light of all of the circumstances of
such action by Board Action or Arbitration or by the court before
which such action was brought 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 cause to such action; and/or
(ii) the relative fault of the Company (and its other directors,
officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s). Indemnitee's right to
contribution under this Paragraph 8 shall be determined in
accordance with, pursuant to and in the same manner as, the
provisions in Paragraphs 2 and 3 hereof relating to Indemnitee's
right to indemnification under this Agreement.
9. Notice to the Company by Indemnitee. Indemnitee agrees to
notify the Company promptly in writing upon being served with or
having actual knowledge of any citation, summons, compliant,
indictment or any other similar document relating to any action
which may result in a claim of indemnification or contribution
hereunder.
10. Non-exclusivity, Etc. The rights of the Indemnitee
hereunder shall be in addition to any other rights Indemnitee may
have under the Company's Certificate or By-laws or the Delaware
General Corporation Law or otherwise, and nothing herein shall be
deemed to diminish or otherwise restrict Indemnitee's right to
indemnification under any such other provision. To the extent
applicable law or the Certificate of Incorporation or the By-laws
of Company, as in effect on the date hereof or at any time in the
future, permit greater indemnification than as provided for in this
Agreement, the parties hereto agree that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by such law or
provision of the Certificate of Incorporation or By-laws and this
Agreement shall be deemed amended without any further action by the
Company or Indemnitee to grant such greater benefits. Indemnitee
may elect to have Indemnitee's rights hereunder interpreted on the
basis of applicable law in affect at the time of execution of this
Agreement, at the time of the occurrence of the Indemnifiable Event
giving rise to a Claim or at the time indemnification is sought.
11. Liability Insurance.
-------------------
(a) To the extent the Company maintains at any time an
insurance policy or policies providing directors' and officers'
liability insurance, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any other Company director or
officer under such insurance policy. The purchase and maintenance
of such insurance shall not in any way limit or affect the rights
and obligations of the parties hereto, and the execution and
delivery of this Agreement shall not in any way be construed to
limit or affect the rights and obligations of the Company and/or of
the other parties under any such insurance policy.
(b) For seven years after the Indemnitee no longer serves
as a director or officer of the Company, the Company shall continue
to provide directors' and officers' liability coverage for
liabilities of the Indemnitee occurring during his service with the
Company on terms no less favorable in terms of coverage and amount
than such insurance maintained by the Company at the date of the
Indemnitee's separation from the Company. In the event such
coverage is not available, the maximum available coverage shall be
maintained pursuant to this covenant.
12. Period of Limitations. No legal action shall be brought and
no cause of action shall be asserted by or on behalf of the Company
or any affiliate of the Company against Indemnitee, Indemnitee's
spouse, heirs, executors or personal or legal representatives after
the expiration of two years from the date of accrual of such cause
of action, and any claim or cause of action of the Company or its
affiliate shall be extinguished and deemed released unless asserted
by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter
period shall govern.
13. Amendments, Etc. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by
both of the 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.
14. Subrogation. In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to
all of the rights of recovery with respect to such payment of
Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
15. No-Duplication of Payments. The Company shall not be liable
under this Agreement to make any payment in connection with any
claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance policy,
By-law or otherwise) of the amounts otherwise indemnifiable
hereunder.
16. Binding Effect, Etc. This Agreement shall be binding upon
and inure to the benefit of and be enforceable against and by the
parties hereto and their respective successors, assigns (including
any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business and/or
assets of the Company), spouses, heirs and personal and legal
representatives. The Company shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the
business and/or assets of the Company, by written agreement in form
and substance satisfactory to Indemnitee, expressly to assume and
agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in
effect regardless of whether Indemnitee continues to serve as a
director and/or officer of the Company or of any other enterprise
at the Company's request.
17. Severability. The provisions of this Agreement shall be
severable in the event that any of the provisions thereof
(including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted
by law.
18. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given when delivered by hand
or when mailed by certified registered mail, return receipt
requested, with postage prepaid:
A. If to Indemnitee, to:
c/o Wildman, Harrold, Allen & Dixon
225 West Wacker Drive, 27th Floor
Chicago, Illinois 60606-1229
or to such other person or address which Indemnitee shall furnish
to the Company in writing pursuant to the above.
B. If to the Company, to:
SafeCard Services, Inc.
3001 East Pershing Boulevard
Cheyenne, Wyoming 82001
Attention: President or Chief Operating Officer
or to such person or address as the Company shall furnish to
Indemnitee in writing pursuant to the above.
19. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed in such
State without giving effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the 1st day of September, 1993.
SAFECARD SERVICES, INC.
By: /s/ Gerald Cahill
--------------------
Name: Gerald Cahill
Title: Chief Operating Officer
INDEMNITEE
------------------------
Marshall L. Burman
Dates Referenced Herein and Documents Incorporated by Reference
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