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EXHIBIT 10.13(g)
INDEMNIFICATION AGREEMENT
BETWEEN CINEMARK USA, INC. AND
A DIRECTOR OF CINEMARK USA, INC.
THIS INDEMNIFICATION AGREEMENT (the "Agreement") dated as of July 19,
1995, is by and between Cinemark USA, Inc., a Texas corporation (the
"Company"), and Gary R. Gibbs ("Director").
RECITALS
A. Director is a member of the Board of Directors of the Company and in
such capacity is performing a valuable service to the Company.
B. The Company's Amended and Restated Articles of Incorporation (the
"Articles of Incorporation") provide for the indemnification of the directors,
officers, employees and agents of the Company to the extent set forth in
Articles VIII and IX of the Articles of Incorporation.
C. The Company's Bylaws (the "Bylaws") provide for the indemnification
of the directors, officers, employees and agents of the Company to the extent
set forth in Article IX, Section 8 of the Bylaws.
D. The Texas Business Corporation Act (the "Corporation Law") provides
that indemnification and advancement of expenses provided in such statute shall
not be exclusive of any other rights under any agreement, and thereby
contemplates that agreements may be entered into between the Company and
members of the Board of Directors of the Company with respect to the
indemnification of such employees.
E. In order to induce Director to serve as a member of the Board of
Directors of the Company for the current term and for any subsequent term to
which he is elected by the shareholders of the Company, the Company has deemed
it to be in its best interest to enter into this Agreement with Director.
NOW, THEREFORE, in consideration of Director's agreement to serve as a
member of the Board of Directors of the Company after the date hereof, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
a. Change in Control. A "Change in Control" shall be deemed to
have occurred if (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act"), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company, is or becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company
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representing 25% or more of the combined voting power of the outstanding
securities of the Company, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board of
Directors or nomination for election by the Company's shareholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for the election was previously so approved, cease for any reason,
to constitute a majority thereof, or (iii) the shareholders of the Company
approve (x) a merger or consolidation of the Company with any other entity
(other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 80% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation), (y) a plan of complete
liquidation of the Company or (z) an agreement or agreements for the sale or
disposition, in a single transaction or series of related transactions, by the
Company of all or substantially all of the property and assets of the Company.
Notwithstanding the foregoing, events otherwise constituting a Change in
Control in accordance with the foregoing shall not constitute a Change in
Control if such events are solicited by the Company and are approved,
recommended or supported by the Board of Directors of the Company in actions
taken prior to, and with respect to, such events.
b. Reviewing Party. A "Reviewing Party" means (i) a quorum of the
Board of Directors consisting of directors who at the time of the vote are not
named defendants or respondents in the proceeding; (ii) if such quorum cannot
be obtained, a committee of the board of directors, designated to act in the
matter by a majority vote of all directors, consisting solely of two or more
directors who at the time of the vote are not named defendants or respondents
in the proceeding; or (iii) special legal counsel selected by the board of
directors or a committee of the board by vote as set forth in (i) or (ii)
above, or, if such a quorum cannot be obtained and such a committee cannot be
established, by a majority vote of all directors.
2. Indemnification of Director. The Company hereby agrees that it shall
hold harmless and indemnify Director to the fullest extent authorized and
permitted by the provisions of the Articles of Incorporation and Bylaws and
the provisions of the Corporation Law, or by any amendment thereof, but in the
case of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than the Articles of
Incorporation, Bylaws or Corporation Law permitted the Company to provide prior
to such amendment, or other statutory provisions authorizing or permitting such
indemnification which is adopted after the date hereof.
3. Limitations on Indemnification. No indemnification pursuant to this
Agreement shall be paid by the Company unless required conditions set forth in
Article 2.02-1 of the Corporation Law (or any similar provisions of any
successor statute) are present, as determined by the Reviewing Party or a court
having jurisdiction in the matter.
4. Advancement of Expenses. In the event of any threatened or pending
action, suit or proceeding in which Director is a party or is involved and
which may give rise to a right of indemnification under this Agreement,
following written request to the Company by Director,
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the Company shall promptly pay to Director amounts to cover expenses incurred
by Director in such proceeding in advance of its final disposition upon the
receipt by the Company of certain written undertakings as required by Article
2.02-1, sections K, L, and M, of the Corporation Law (or any similar provisions
of any successor statute). The advancement of expenses by the Company shall
include the payment of an advance retainer if required by counsel to Director
in connection with the investigation or defense of any matter for which
indemnification is provided hereunder. The Company further agrees that
statements for fees and expenses of counsel or other costs incurred by Director
for which indemnification is provided hereunder may be rendered directly to the
Company for payment.
5. Determination of Indemnification; Burden of Proof. With respect to
all matters concerning the rights of Director to indemnification and payment of
expenses under this Agreement or under the provisions of the Articles of
Incorporation and Bylaws now or hereafter in effect, the Company shall appoint
a Reviewing Party and any determination by the Reviewing Party shall be
conclusive and binding on the Company and Director. If under applicable law,
the entitlement of Director to be indemnified under this Agreement depends on
whether a standard of conduct has been met, the burden of proof of establishing
that Director did not act in accordance with a standard of conduct shall rest
with the Company. Director shall be presumed to have acted in accordance with
such standard and entitled to indemnification or advancement of expenses
hereunder, as the case may be, unless, based upon a preponderance of the
evidence, it shall be determined by the Reviewing Party that Director did not
meet such standard. For purposes of this Agreement, unless otherwise expressly
stated herein, the termination of any 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 Director 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.
6. Effect of Change in Control. If there has not been a Change in
Control after the date of this Agreement, the determination of (i) the rights
of Director to indemnification and payment of expenses under this Agreement or
under the provisions of the Articles of Incorporation and the Bylaws, (ii)
standard of conduct and (iii) evaluation of the reasonableness of amounts
claimed by Director shall be made by the Reviewing Party or such other body or
persons as may be permitted by the Corporation Law. If there has been a Change
in Control after the date of this Agreement, such determination and evaluation
shall be made by a special, independent counsel who is selected by Director and
approved by the Company, which approval shall not be unreasonably withheld, and
who has not otherwise performed services for Director or the Company.
7. Continuation of Indemnification. All agreements and obligations of
the Company contained herein shall continue during the period that Director is
a director, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, and shall
continue thereafter so long as Director shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that Director
was a director of the Company or serving in any other capacity referred to
herein.
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8. Notification and Defense of Claim. Promptly after receipt by
Director of notice of the commencement of any action, suit or proceeding,
Director shall, if a claim in respect hereof is to be made against the Company
under this Agreement, notify the Company of the commencement thereof; provided,
however, that delay in so notifying the Company shall not constitute a waiver
or release by Director of rights hereunder and that omission by Director to so
notify the Company shall not relieve the Company from any liability which it
may have to Director otherwise than under this Agreement. With respect to any
such action, suit or proceeding as to which Director notifies the Company of
the commencement thereof:
a. The Company shall be entitled to participate therein at its own
expense; and
b. Except as otherwise provided below, to the extent that it may
wish, the Company, jointly with any other indemnifying party similarly
notified, shall be entitled to assume the defense thereof and to employ counsel
reasonably satisfactory to Director. After notice from the Company to Director
of its election to so assume the defense thereof, the Company shall not be
liable to Director under this Agreement for any legal or other expenses
subsequently incurred by Director in connection with the defense thereof other
than reasonable costs of investigation, expenses payable pursuant to Section 4
of this Agreement, or as otherwise provided below. Director shall have the
right to employ counsel of his own choosing in such action, suit or proceeding
but the fees and expenses of such counsel incurred after notice from the
Company of assumption by the Company of the defense thereof shall be at the
expense of Director unless (i) the employment of counsel by Director has been
specifically authorized by the Company, such authorization to be conclusively
established by action by disinterested members of the Board of Directors though
less than a quorum; (ii) representation by the same counsel of both Director
and the Company would, in the reasonable judgment of both Director and the
Company, be inappropriate due to an actual or potential conflict of interest
between the Company and Director in the conduct of the defense of such action,
such conflict of interest to be conclusively established by an opinion of
counsel to the Company to such effect; (iii) the counsel employed by the
Company and reasonably satisfactory to Director has advised Director in writing
that such counsel's representation of Director would likely involve such
counsel in representing differing interests which could adversely affect the
judgment or loyalty of such counsel to Director, whether it be a conflicting,
inconsistent, diverse or other interest; or (iv) the Company shall not in fact
have employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of counsel shall be paid by the Company. The
Company shall not be entitled to assume the defense of any action, suit or
proceeding brought by or on behalf of the Company or as to which a conflict of
interest has been established as provided in (ii) hereof. Notwithstanding the
foregoing, if an insurance company has supplied directors' and officers'
liability insurance covering an action, suit or proceeding, then such insurance
company shall employ counsel to conduct the defense of such action, suit or
proceeding unless Director and the Company reasonably concur in writing that
such counsel is unacceptable.
c. The Company shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. The Company shall not settle any action or claim
in any manner which would impose any liability or penalty on Director without
Director's written consent. Neither the Company nor Director shall
unreasonably withhold consent to any proposed settlement.
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9. Enforcement.
a. The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Company hereby
in order to induce Director to serve as a director of the Company and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity.
b. If a claim for indemnification or advancement of expenses is not
paid in full by the Company within thirty (30) days after a written claim by
Director has been received by the Company, Director may at any time assert the
claim and bring suit against the Company to recover the unpaid amount of the
claim. In the event Director is required to bring any action to enforce rights
or to collect moneys due under this Agreement and is successful in such action,
the Company shall reimburse Director for all of Director's reasonable
attorneys' fees and expenses in bringing and pursuing such action.
10. Proceedings by Director. The Company shall not be liable to make any
payment under this Agreement in connection with any action, suit or proceeding,
or any part thereof, initiated by Director unless such action, suit or
proceeding, or part thereof, (i) was authorized by the Company, such
authorization to be conclusively established by action by disinterested members
of the Board of Directors though less than a quorum or (ii) was brought by
Director pursuant to Section 9(b) hereof.
11. Effectiveness. This Agreement is effective for, and shall apply to,
(i) any claim which is asserted or threatened before, on or after the date of
this Agreement but for which no action, suit or proceeding has been brought
prior to the date hereof and (ii) any action, suit or proceeding which is
threatened before, on or after the date of this Agreement but which is not
pending prior the date hereof. This Agreement shall not apply to any action,
suit or proceeding which was brought before the date of this Agreement. So
long as the foregoing is satisfied, this Agreement shall be effective for, and
be applicable to, acts or omissions occurring prior to, on or after the date
hereof.
12. Non-exclusivity. The rights of Director under this Agreement shall
not be deemed exclusive, or in limitation of, any rights to which Director may
be entitled under any applicable common or statutory law, or pursuant to the
Articles of Incorporation, the Bylaws, vote of shareholders or otherwise.
13. Other Payments. The Company shall not be liable to make any payment
under this Agreement in connection with any action, suit or proceeding against
Director to the extent Director has otherwise received payment of the amounts
otherwise payable by the Company hereunder.
14. Subrogation. In the event the Company makes any payment under this
Agreement, the Company shall be subrogated, to the extent of such payment, to
all rights of recovery of Director with respect thereto, and Director shall
execute all agreements, instruments, certificates or other documents and do or
cause to be done all things necessary or appropriate to secure such
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recovery rights to the Company including, without limitation, executing such
documents as shall enable the Company to bring an action or suit to enforce
such recovery rights.
15. Survival; Continuation. The rights of Director under this Agreement
shall inure to the benefit of Director, his heirs, executors, administrators,
personal representatives and assigns, and this Agreement shall be binding upon
the Company, its successors and assigns. The rights of Director under this
Agreement shall continue so long as Director may be subject to any action, suit
or proceeding because of the fact that Director is or was an employee or agent
of the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. If the Company, in a single transaction or
series of related transactions, sells, leases, exchanges, or otherwise disposes
of all or substantially all of its property and assets, the Company shall, as a
condition precedent to any such transaction, cause effective provision to be
made so that the persons or entitles acquiring such property and assets shall
become bound by and replace the Company under this Agreement.
16. Amendment and Termination. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless made in writing
signed by both parties hereto.
17. Headings. Section headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
18. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed by certified mail (return receipt requested) or sent by overnight
delivery service, cable, telegram, facsimile transmission or telex to the
parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice:
a. if to the Company;
Cinemark USA, Inc.
7502 Greenville Avenue
Suite 800, LB-9
Dallas, Texas 75231
Attn: Lee Roy Mitchell
b. if to the Director, to the address of Director set forth on the
signature page hereof.
Notice so given shall, in the case of notice so given by mail, be deemed to be
given and received on the fourth calendar day after posting, in the case of
notice so given by overnight delivery service, on the date of actual delivery
and, in the case of notice so given by cable, telegram, facsimile transmission,
telex or personal delivery, on the date of actual transmission or, as the case
may be, personal delivery.
19. Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable under any applicable law, then such
contravention or invalidity shall not invalidate the entire Agreement. Such
provision shall be deemed to be modified to the extent necessary
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to render it legal, valid and enforceable, and if no such modification shall
render it legal, valid and enforceable, then this Agreement shall be construed
as if not containing the provision held to be invalid, and the rights and
obligations of the parties shall be construed and enforced accordingly.
20. Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
in any way.
21. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
22. CHOICE OF LAW. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
CINEMARK USA, INC.
By: /s/ Lee Roy Mitchell
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Name: Lee Roy Mitchell
Title: Chief Executive Officer
DIRECTOR
/s/ Gary R. Gibbs
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Gary R. Gibbs
Address:
1169 Rock Creek Rd.
Hot Springs, Arkansas 71913
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