10.30. Indemnification Agreement between the Registrant and certain executives
and directors.
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INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of March 3, 1997 (this
"Agreement"), by and between Guess ?, Inc., a Delaware corporation (the
"Company"), and Aldo Papone ("Indemnitee").
W I T N E S S E T H:
WHEREAS, the Company desires to attract and retain the services of
able persons to serve as officers and directors of the Company and to indemnify
certain of its officers, and its directors, except as otherwise provided in
Section 3 of this Agreement, to the fullest extent of the law;
WHEREAS, the Company and Indemnitee recognize the increasing
difficulty in obtaining officers' and directors' liability insurance, the
significant increase in the cost of such insurance and the general reduction in
the coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to expensive litigation risks at the same time that liability insurance has been
severely limited; and
WHEREAS, neither Indemnitee nor the Company regards statutory
indemnification protection as adequate given the present circumstances;
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. (a) Third-Party Proceedings. The Company shall indemnify Indemnitee
to the full extent of Delaware law, except as otherwise provided in Section 3 of
this Agreement, if Indemnitee is or was a party or is threatened to be made a
party to any threatened, pending or completed suit, action, proceeding,
arbitration or alternative dispute resolution mechanism, investigation,
administrative hearing, whether civil, criminal, administrative or
investigative (any such suit, action, proceeding, arbitration or alternative
dispute resolution mechanism, investigation, administrative hearing being
referred to herein as a "Proceeding") (other than an action by or in the right
of the Company) by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company or any subsidiary of the Company, by
reason of any action or inaction on the part of Indemnitee while an officer or
director of the Company or any subsidiary of the Company or by reason of the
fact that Indemnitee is or was serving at the request of the Company as a
director, officer, employee or agent of another Person (as defined in Section
6(d)), against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection with such action or proceeding
if Indemnitee acted in good faith and in a manner
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Indemnitee reasonably believed to be in or not opposed to the best interests
of the Company and its stockholders, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
(b) Proceedings By or in the Right of the Company. The Company
shall indemnify Indemnitee to the full extent of Delaware law, except as
otherwise provided in Section 3 of this Agreement, if Indemnitee is or was a
party or is threatened to be made a party to any threatened, pending or
completed Proceeding by or in the right of the Company or any subsidiary of
the Company to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a director, officer, employee or agent of the Company or
any subsidiary of the Company, by reason of any action or inaction on the
part of Indemnitee while an officer or director of the Company or any
subsidiary of the Company or by reason of the fact that Indemnitee is or was
serving at the request of the Company as a director, officer, employee or
agent of another Person, against expenses (including attorneys' fees) and, to
the fullest extent permitted by Delaware law, amounts paid in settlement (if
such settlement is approved by the Company, which approval shall not be
unreasonably withheld), in each case to the extent actually and reasonably
incurred by Indemnitee in connection with the defense or settlement of such
Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company and its stockholders, except that no indemnification shall be made in
respect of any claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company and its stockholders in the performance
of Indemnitee's duty to the Company and its stockholders unless and only to
the extent that the Court of Chancery of the State of Delaware, or the court
in which such action or proceeding shall have been brought or is pending,
shall determine that in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnity for expenses, and then only to
the extent that the court shall determine.
(c) Selection of Counsel. In the event the Company shall be
obligated under Section 1(a) or (b) hereof to pay the expenses of any Proceeding
against Indemnitee, the Company shall be entitled to assume the defense of such
Proceeding, with counsel approved by Indemnitee (who shall not unreasonably
withhold such approval), upon the delivery to Indemnitee of written notice of
its election so to do. After delivery of such notice, approval of such counsel
by Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same Proceeding,
provided, that, (i) Indemnitee shall have the right to employ his counsel in any
such proceeding at Indemnitee's expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized in writing by the Company,
(B) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense
and shall have notified the Company in writing thereof, (C) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between
Indemnitee and other indemnitees of the Company being represented by counsel
retained by the Company in the same proceeding and shall have notified the
Company in writing thereof or (D) the Company shall not, in fact, have employed
counsel to assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.
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2. Contribution. If, when Indemnitee has met the applicable standard
of conduct, the indemnification provisions set forth in Section 1 should,
under applicable law, be to any extent unenforceable, then the Company agrees
that it shall be treated as though it is or was a party to the threatened,
pending or completed Proceeding in which Indemnitee is or was involved and
that the Company shall contribute to the amounts paid or payable by
Indemnitee as a result of such expenses (including attorneys' fees),
judgments in third-party Proceedings, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
Indemnitee on the other in connection with such action or inaction, or
alleged action or inaction, as well as any other relevant equitable
considerations.
For purposes of this Section 2, the relative benefit to the Company
shall be deemed to be the benefits accruing to it and to all of its
directors, officers, employees and agents (other than Indemnitee), as a group
and treated as one entity, and the relative benefit to Indemnitee shall be
deemed to be an amount not greater than Indemnitee's yearly base salary or
director's compensation, as the case may be, from the Company during the
first year in which the action or inaction, or alleged action or inaction,
forming the basis for the threatened, pending or contemplated Proceeding was
alleged to have occurred plus the amount, if any, of monetary benefit and
other consideration received by Indemnitee in the transaction(s) that gave
rise to such Proceeding. The relative fault shall be determined by reference
to, among other things, the fault of the Company and all of its directors,
officers, employees and agents (other than Indemnitee), as a group and
treated as one entity, and such group's relative intent, knowledge, access to
information and opportunity to have altered or prevented the action or
inaction, or alleged action or inaction, forming the basis for the
threatened, pending or contemplated Proceeding, and Indemnitee's relative
fault in light of such factors on the other hand.
3. Limitations to Rights of Indemnification and Advancement of
Expenses. Except as otherwise provided in Sections 9 and 12 of this
Agreement, Indemnitee shall not be entitled to indemnification or advancement
of expenses under this Agreement:
(a) with respect to any Proceeding initiated, brought or made by
Indemnitee (i) against the Company, unless a Change in Control (as defined
in Section 5(b) of this Agreement) shall have occurred, or (ii) against any
person other than the Company, unless approved in advance by the board of
directors of the Company (the "Board");
(b) on account of any suit in which it shall be determined by final
judgment by a court having jurisdiction in the matter that Indemnitee
intentionally caused or intentionally contributed to the injury complained
of with the knowledge that such injury would occur;
(c) on account of Indemnitee's conduct which shall be determined by
final judgment by a court having jurisdiction in the matter that Indemnitee
was knowingly fraudulent, deliberately dishonest, engaged in willful
misconduct or that Indemnitee received an improper personal benefit;
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(d) for any expenses incurred by Indemnitee with respect to any
proceeding instituted by Indemnitee to enforce or interpret this Agreement,
to the extent that a court of competent jurisdiction determines that any of
the material assertions made by Indemnitee in such proceeding was not made
in good faith or was frivolous;
(e) for expenses or liabilities of any type whatsoever (including,
but not limited to, judgments, fines, ERISA excise taxes or penalties and
amounts paid in settlement) which have been paid directly to Indemnitee by
an insurance carrier under a policy of officers' and directors' liability
insurance maintained by the Company;
(f) for expenses or the payment of profits arising from the purchase
and sale by Indemnitee of securities in violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
similar successor statute; or
(g) if it shall be determined by final judgment by a court having
jurisdiction in the matter that such indemnification is not lawful.
4. Procedure for Determination of Entitlement to Indemnification. (a)
To obtain indemnification under this Agreement, Indemnitee shall submit to
the Company a written request, including such documentation and information
as is reasonably available to Indemnitee and is reasonably necessary to
determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt
of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification, a
determination with respect to Indemnitee's entitlement thereto shall be made in
the specific case as follows:
(i) if a Change in Control (as defined in Section 5(b) of this
Agreement) shall have occurred, by Independent Counsel (as defined in
Section 5(a) of this Agreement) in a written opinion to the Board, a copy
of which shall be delivered to Indemnitee (unless Indemnitee shall request
that such determination be made by the Board or the Stockholders, in which
case the determination shall be made in the manner provided below in clause
(ii)); or
(ii) if a Change in Control shall not have occurred, (A) by the
Board by a majority vote of a quorum consisting of disinterested directors,
(B) if a quorum of the Board consisting of disinterested directors is not
obtainable or, even if obtainable, such quorum of disinterested directors
so directs, by Independent Counsel in a written opinion to the Board, a
copy of which shall be delivered to Indemnitee or (C) by the stockholders
of the Company.
(c) If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall cooperate with the person, persons
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or entity making such determination with respect to Indemnitee's entitlement
to indemnification, including providing to such person, persons or entity
upon reasonable advance request any documentation or information that is not
privileged or otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating shall be borne by the Company (irrespective of
the determination as to Indemnitee's entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(d) If a Change in Control shall not have occurred, the
Independent Counsel shall be selected by the Board, and the Company shall
give written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. If a Change in Control shall have occurred,
the Independent Counsel shall be selected by Indemnitee (unless Indemnitee
shall request that such selection be made by the Board), and Indemnitee shall
give written notice to the Company advising it of the identity of the
Independent Counsel so selected. In either event, Indemnitee or the Company,
as the case may be, may, within 7 days after such written notice of selection
shall have been given, deliver to the Company or to Indemnitee, as the case
may be, a written objection to such selection. Such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of "Independent Counsel" as defined in Section 5(a) of
this Agreement, and the objection shall set forth with particularity the
factual basis of such assertion. If such written objection is made, the
Independent Counsel so selected may not serve as Independent Counsel unless
and until a court has determined that such objection is without merit. If,
twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 4 hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 4(d), either the Company or Indemnitee may petition the
Court of Chancery of the State of Delaware or other court of competent
jurisdiction for resolution of any objection which shall have been made by
the Company or Indemnitee to the other's selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by the
court or by such other person as the court shall designate. The person with
respect to whom an objection is favorably resolved or the person so appointed
shall act as Independent Counsel under Section 4 hereof. The Company shall
pay any and all reasonable fees and expenses incident to the procedures of
this Section 4, including reasonable fees and expenses incurred by such
Independent Counsel regardless of the manner in which such Independent
Counsel was selected or appointed. Upon the due commencement of any judicial
proceeding or arbitration pursuant to Section 12 of this Agreement,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
5. (a) "Independent Counsel" means a law firm or a member of a law firm
that neither at the time in question, nor in the five years immediately
preceding such time has been retained to represent (i) the Company or Indemnitee
in any matter material to either such party or (ii) any other party to the
proceeding giving rise to a claim for indemnification under this Agreement.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing under the law of the State of Delaware,
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would be precluded from representing either the Company or Indemnitee in an
action to determine Indemnitee's rights under this Agreement.
(b) "Change in Control" means the occurrence of any of the following
events:
(i) the Company is merged, consolidated or reorganized into or
with another corporation or other entity, and as a result of such merger,
consolidation or reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation or entity
immediately after such transaction are held in the aggregate by the holders
of voting stock immediately prior to such transaction;
(ii) the Company sells or otherwise transfers all or
substantially all of its assets to another corporation or other entity in
which, after giving effect to such sale or transfer, the holders of voting
stock of the Company immediately prior to such sale or transfer hold in the
aggregate less than a majority of the combined voting power of the
then-outstanding securities of such other corporation;
(iii) there is a report filed on Schedule 13D or Schedule
14D-l (or any successor schedule, form or report or item therein), each as
promulgated pursuant to the Exchange Act, disclosing that any person or
entity, other than any shareholder of the Company (and its affiliates)
owning 10% or more of the Company's voting stock on the date hereof, has
become the beneficial owner (as the term "beneficial owner" is defined
under Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of securities representing 50% or more of the combined voting
power of the Company's voting stock; or
(iv) if during any period of two consecutive years individuals
who at the beginning of any such period constitute the Board cease for any
reason to constitute at least a majority thereof; provided, however, that
for purposes of this clause (iv) each director of the Company who is first
elected, or first nominated for election by the Company's stockholders, by
a vote of at least majority of the directors of the Company (or a committee
of the Board) then still in office who were directors of the Company at the
beginning of any such period shall be deemed to have been a director of the
Company at the beginning of such period.
Notwithstanding the provisions of clause (iii) above, unless otherwise
determined in the specific case by majority vote of the Board, a "Change in
Control" shall not be deemed to have occurred solely because the Company, any
subsidiary or any employee stock ownership plan or any other employee benefit
plan of the Company or any subsidiary either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-l or Schedule 14A (or any successor schedule, form or report or
item therein) under the Exchange Act disclosing beneficial ownership by it of
shares of voting stock of the Company, whether in excess of 50% or otherwise,
or because the Company reports that a change in control of the Company has
occurred or will occur in the future by reason of such beneficial ownership.
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6. Presumptions and Effect of Certain Proceedings. (a) In making a
determination with respect to entitlement to indemnification hereunder, the
person, persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 4 of
this Agreement, and the Company shall bear the burden of proof to rebut that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption.
(b) The termination of any Proceeding or of any claim, issue or
matter therein by judgment, order, settlement or conviction, or upon a plea
of nolo contendere or its equivalent, shall not (except as otherwise
expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not
act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Company or, with respect to any
criminal action or proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.
(c) Indemnitee's conduct with respect to an employee benefit plan for
a purpose he reasonably believed to be in the interests of the participants in
and beneficiaries of the plan shall be deemed to be conduct that Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.
(d) For purposes of any determination hereunder, Indemnitee shall
be deemed to have acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company, or, with
respect to any criminal action or proceeding, to have had no reasonable cause
to believe his conduct was unlawful, if his action was based on (i) the
records or books of account of the Company or another Person, including
financial statements, (ii) information supplied to him by the officers of the
Company or another Person in the course of their duties, (iii) the advice of
legal counsel for the Company or another Person, or (iv) information or
records given or reports made to the Company or another Person by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Company or another Person. The term
"another Person" as used in this Agreement shall mean any other corporation
or any partnership, joint venture, trust, employee benefit plan or other
enterprise of which Indemnitee is or was serving at the request of the
Company as an officer, director, partner, trustee, employee or agent. The
provisions of this Section 6(d) shall not be deemed to limit in any way the
other circumstances in which Indemnitee may be deemed to have met the
applicable standard of conduct set forth in Section 1.
7. Success on Merits or Otherwise. Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee has been successful on the
merits or otherwise in defense of any action, suit or proceeding described in
Section 1 hereof, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the investigation, defense,
settlement or appeal thereof. For purposes of this Section 7, the term
"successful on the merits or otherwise" shall include, but not be limited to,
(i) any termination, withdrawal or dismissal (with or without prejudice)
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of any Proceeding against Indemnitee without any express finding of liability
or guilt against him, (ii) the expiration of 180 days after the making of any
claim or threat of a Proceeding without the institution of the same and
without any promise of payment or payment made to induce a settlement or
(iii) the settlement of any Proceeding under Section 1, pursuant to which
Indemnitee pays less than $25,000.
8. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the claims, damages, expenses (including attorneys' fees), judgments,
fines or amounts paid in settlement by Indemnitee in connection with the
investigation, defense, settlement or appeal of any Proceeding specified in
Section 1, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. The party or parties making the determination shall determine the
portion (if less than all) of such claims, damages, expenses (including
attorneys' fees), judgments, fines or amounts paid in settlement for which
Indemnitee is entitled to indemnification under this Agreement.
9. Costs. All the costs of making the determination required by Section
4 hereof shall be borne solely by the Company, including, but not limited to,
the costs of legal counsel, proxy solicitations and judicial determinations.
The Company shall also be solely responsible for paying (i) all reasonable
expenses incurred by Indemnitee to enforce this Agreement, including, but not
limited to, the costs incurred by Indemnitee to obtain court-ordered
indemnification pursuant to Section 12, regardless of the outcome of any such
application or proceeding, and (ii) all costs of defending any Proceedings
challenging payments to Indemnitee under this Agreement.
10. Advance of Expenses. The Company shall advance all expenses incurred
by or on behalf of Indemnitee in connection with any Proceeding within twenty
(20) days after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to
repay any expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified against such expenses, which undertaking shall
be accepted by or on behalf of the Company without reference to the financial
ability of Indemnitee to make repayment, and without the pledging of any
security by Indemnitee. Notwithstanding Indemnitee's above-described rights to
advancement of expenses, no advance of expenses shall be made in the
circumstances proscribed by Section 3(a). Notwithstanding any other provision
of this Agreement, if Indemnitee requests an adjudication or an award in
arbitration pursuant to the provisions of Section 12 below in order to establish
an entitlement to indemnification or advancement of expenses, any determination
made pursuant to Section 4 of this Agreement that Indemnitee is not entitled to
indemnification or to receive advancement of expenses shall not be binding and
Indemnitee shall not be required to reimburse the Company for any expense
advance unless and until a final judicial determination or award in arbitration
is made with respect thereto as to which all rights of appeal therefrom have
been exhausted or lapsed.
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11. Indemnification for Expenses of a Witness. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by
reason of any event or occurrence related to the fact that Indemnitee is or
was a director, officer, employee or agent of the Company or any subsidiary
of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another Person, a witness in any
Proceeding, whether instituted by the Company or any other party, and to
which Indemnitee is not a party, he shall be indemnified against all expenses
actually and reasonably incurred by him or on his behalf in connection
therewith.
12. Enforcement. (a) If a claim for indemnification or advancement of
expenses made to the Company pursuant to Section 3 or 10 is not timely paid
in full to Indemnitee by the Company as required by Section 3 or 10,
respectively, Indemnitee shall be entitled to seek judicial enforcement of
the Company's obligations to make such payment in an appropriate court of the
state of Delaware or any other court of competent jurisdiction. In the event
that a determination is made that Indemnitee is not entitled to
indemnification or advancement of expenses hereunder, (i) Indemnitee may seek
a de novo adjudication of Indemnitee's entitlement to such indemnification or
advancement either, at Indemnitee's sole option, in (A) an appropriate court
of the state of Delaware or any other court of competent jurisdiction or (B)
an arbitration to be conducted by a single arbitrator pursuant to the rules
of the American Arbitration Association; (ii) any such judicial proceeding or
arbitration shall not in any way be prejudiced by, and Indemnitee shall not
be prejudiced in any way by such adverse determination; and (iii) in any such
judicial proceeding or arbitration the Company shall have the burden of
proving that Indemnitee is not entitled to indemnification or advancement of
expenses under this Agreement. Indemnitee shall commence a proceeding seeking
an adjudication of Indemnitee's right to indemnification or advancement of
expenses pursuant to the preceding sentence within one year following the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 12(a); provided, however, that the foregoing time
limitation shall not apply in respect of a proceeding brought by Indemnitee
to enforce Indemnitee's rights under Section 7 hereof.
(b) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to the provisions of Section 12(a)
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.
(c) In any action brought under this Section 12, it shall be a
defense to a claim for indemnification (other than an action brought to enforce
a claim for advancement of expenses) that Indemnitee has not met the standards
of conduct which make it permissible under Delaware law for the Company to
indemnify Indemnitee for the amount claimed. The burden of proving such defense
shall be on the Company.
(d) It is the intent of the Company that Indemnitee not be
required to incur the expenses associated with the enforcement of his rights
under this Agreement by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
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extended to Indemnitee hereunder. Accordingly, if it should appear to
Indemnitee that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person
takes any action to declare this Agreement void or unenforceable, or
institutes any Proceeding designed (or having the effect of being designed)
to deny, or to recover from, Indemnitee the benefits intended to be provided
to Indemnitee hereunder, the Company irrevocably authorizes Indemnitee from
time to time to retain counsel of his choice, at the expense of the Company
as hereafter provided, to represent Indemnitee in connection with the
initiation or defense of any litigation or other legal action, whether by or
against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. Regardless of the outcome
thereof, but subject to Indemnitee having acted in good faith, the Company
shall pay and be solely responsible for any and all costs, charges and
expenses, including attorneys' and others' fees and expenses, incurred by
Indemnitee (i) as a result of the Company's failure to perform this Agreement
or any provision thereof or (ii) as a result of the Company's or any person's
contesting the validity or enforceability of this Agreement or any provision
thereof as aforesaid.
13. Liability Insurance and Funding. To the extent the Company
maintains 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 director or officer of the Company. If, at the time of the
receipt of a notice of a claim pursuant to Section 4 hereof, the Company has
directors' and officers' liability insurance in effect, the Company shall
give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies. The Company
shall have no obligation to obtain or maintain such insurance.
14. Merger or Consolidation. In the event that the Company shall be a
constituent corporation in a merger, consolidation or other reorganization,
the Company shall require as a condition thereto, (a) if it shall not be the
surviving, resulting or other corporation therein, the surviving, resulting
or acquiring corporation to agree to indemnify Indemnitee to the full extent
provided herein, and (b) whether or not the Company is the surviving,
resulting or acquiring corporation therein, Indemnitee shall also stand in
the same position under this Agreement with respect to the surviving,
resulting or acquiring corporation as Indemnitee would have with respect to
the Company if the Company's separate existence had continued.
15. Nondisclosure of Payments. Except as expressly required by federal
securities laws or other applicable laws, Indemnitee shall not disclose any
payments made under this Agreement, whether indemnification or advancement of
expenses, unless prior written approval of the Company is obtained. Any
payments to Indemnitee that must be disclosed shall, unless otherwise
required by law, be described only in the Company proxy or information
statements relating to special and/or annual meetings of the Company's
stockholders, and the Company shall afford Indemnitee the reasonable
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opportunity to review all such disclosures and, if requested, to explain in
such statement any mitigating circumstances regarding the events reported.
16. Nonexclusivity and Severability; Subrogation. (a) The right to
indemnification and advancement of expenses provided by this Agreement shall
not be exclusive of any other rights to which Indemnitee may be entitled
under the Restated Certificate of Incorporation or Bylaws of the Company,
Delaware law, any other statute, insurance policy, agreement, vote of
stockholders of the Company or of the Board (or otherwise), both as to
actions in his official capacity and as to actions in another capacity while
holding such office, and shall continue after Indemnitee has ceased to be a
director or officer of the Company and shall inure to the benefit of his
heirs, executors and administrators; provided, however, that to the extent
Indemnitee otherwise would have any greater right to indemnification and/or
advancement of expenses under any provision of the Restated Certificate of
Incorporation or the Bylaws of the Company, Indemnitee shall be deemed to
have such greater right pursuant to this Agreement; and, provided, further,
that to the extent that any change is made to the Delaware law (whether by
legislative action or judicial decision), the Restated Certificate of
Incorporation and/or the Bylaws that permits any greater right to
indemnification and/or advancement of expenses than that provided under this
Agreement as of the date hereof, Indemnitee shall be deemed to have such
greater right pursuant to this Agreement. No amendment, alteration, or
repeal of this Agreement or of any provision hereof shall limit or restrict
any right of Indemnitee under this Agreement in respect of any action taken
or omitted by such Indemnitee prior to such amendment, alteration, or repeal.
(b) If any provision or provisions of this Agreement are held to be
invalid, illegal or unenforceable for any reason whatsoever: (i) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including, without limitation, all portions of any provisions 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 (ii) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, all portions of any
provisions 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 manifested
by the provision held invalid, illegal or unenforceable.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
actions necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.
17. Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressed, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
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18. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
that in certain instances federal law or public policy may override
applicable state law and prohibit the Company from indemnifying its directors
and officers under this Agreement or otherwise. For example, the Company and
Indemnitee acknowledge that the Securities and Exchange Commission (the
"Commission") has taken the position that indemnification is not permissible
for liabilities arising under certain federal securities laws, and federal
legislation prohibits indemnification for certain ERISA violations.
Indemnitee understands and acknowledges that the Company has undertaken or
may be required in the future to undertake with the Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Delaware, without giving effect to
principles of conflict of laws.
20. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the state of Delaware
for all purposes in connection with any action, suit or proceeding which arises
out of or relates to this Agreement.
21. Identical 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 enforcement is sought needs to
be produced to evidence the existence of this Agreement.
22. Modification; Survival. This Agreement may be modified only by an
instrument in writing signed by both parties hereto. The provisions of this
Agreement shall survive the death, disability or incapacity of Indemnitee or the
termination of Indemnitee's service as a director or officer of the Company and
shall inure to the benefit of Indemnitee's heirs, executors and administrators.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INDEMNITEE Guess ?, Inc.
By:
Eleven additional identical Indemnification Agreements in the form above,
dated August 13, 1996, were entered into between the Company and each of the
following persons: Maurice Marciano, Paul Marciano, Armand Marciano, Francis
K. Duane, Edward Loseman, Nancy Shachtman, Terence Tsang, Michael Wallen,
Glenn Weinman, Andrea Weiss, Roger Williams.
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