Exhibit 10.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") dated as of _________,
1997, between Dispatch Management Services Corp., a Delaware corporation (the
"Company"), and ____________ ("Indemnitee").
RECITALS
A. Indemnitee is a _________________________________ of the Company and
in such capacity is performing a valuable service to the Company.
B. The Company's Amended and Restated Bylaws (the "Bylaws") provide for
the indemnification of directors or officers of the Company.
C. The Certificate of Incorporation of the Company, as amended (the
"Certificate"), provides that the Company shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify the directors and officers
of the Company and advance expenses incurred by such directors and officers
in proceedings to which they may be party as a result of their status as
directors and officers. The Company may, in its discretion, indemnify other
persons from time to time on terms and conditions deemed appropriate by the
Company's Board of Directors (the "Corporation Law").
D. The Corporation Law specifically 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 or officers of the Company with respect to the indemnification
of such directors or officers.
E. In accordance with the authorization provided in the Corporation
Law, the Company may purchase and maintain a policy or policies of directors'
and officers' liabilities insurance (the "Insurance") covering certain
liabilities which may be incurred by the Company's directors and officers in
the performance of their services to the Company.
F. The general availability of directors' and officers' liability
insurance covering certain liabilities which may be incurred by the Company's
directors and officers in the performance of their services to the Company
and the applicability, amendment and enforcement of statutory and bylaw
provisions have raised questions concerning the adequacy and reliability of
the protection afforded to directors and officers.
G. In order to induce Indemnitee to serve as a _______________________
of the Company for the current term and for any subsequent term to which he
is elected or
nominated, the Company has deemed it to be in its best interest to enter into
this Agreement with Indemnitee.
NOW, THEREFORE, in consideration of Indemnitee's agreement to serve as a
_____________________________________ 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 or entity, or group of persons or entities acting
together, other than the Company or an employee benefit plan of the
Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended) of any voting security of the Company and immediately after
such acquisition such person, entity or group is, directly or
indirectly, the Beneficial Owner of voting securities representing 33%
or more of the total voting power of all of the then-outstanding
voting securities of the Company and has a larger percentage of voting
securities of the Company than any other person, entity or group
holding voting securities of the Company, unless the transaction
pursuant to which such acquisition is made is approved by at least
two-thirds (2/3) of the Board of Directors (the "Board");
(ii) the following individuals no longer constitute a majority of
the members of the Board: (A) the individuals who, as of the closing
date of the Company's initial public offering, constitute the Board
(the "Original Directors"); (B) the individuals who thereafter are
elected to the Board and whose election, or nomination for election,
to the Board was approved by a vote of at least two-thirds (2/3) of
the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election);
and (C) the individuals who are elected to the Board and whose
election, or nomination for election, to the Board was approved by a
vote of at least two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office (such directors
also becoming "Additional Original Directors" immediately following
their election);
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation
of any such transaction if stockholder approval is not obtained, other
than any such transaction which
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would result in at least 75% of the total voting power represented by
the voting securities of the surviving entity outstanding immediately
after such transaction being Beneficially Owned by at least 75% of the
holders of outstanding voting securities of the Company immediately
prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
i) the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the
Company).
(b) Reviewing Party. A "Reviewing Party" means (i) the Board or a
committee of directors of the Company, who are not officers, appointed by
the Board, provided that a majority of such directors are not parties to
the claim or (ii) special, independent counsel selected and appointed by
the Board or by a committee of directors of the Company who are not
officers.
2. Indemnification of Indemnitee.
The Company hereby agrees that it shall hold harmless and indemnify
Indemnitee to the fullest extent authorized and permitted by the provisions
of the Certificate 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 Certificate, 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. Insurance.
3.1 Insurance Policies. So long as Indemnitee may 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 Indemnitee is or was a director or officer, to the
extent that the Company maintains one or more 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 applicable to any director or officer then
serving the Company.
3.2 Maintenance of Insurance. The Company shall not be required to
maintain the Insurance or any policy or policies of comparable insurance, as
the case may be, if such insurance is not reasonably available or if, in the
reasonable business judgment of the Board of the Company which shall be
conclusively established by such determination by the Board, or any
appropriate committee thereof, either (i) the premium cost for such insurance
is substantially disproportionate to the amount of coverage thereunder or
(ii) the coverage
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provided by such insurance is so limited by exclusions that there is
insufficient benefit from such insurance.
3.3 Self-Insurance. To the extent Indemnitee is not indemnified under
other Sections of this Agreement and is not fully, by reason of deductible or
otherwise, covered by directors' and officers' liability insurance, the
Company shall maintain self-insurance for, and thereby indemnify and hold
harmless, Indemnitee from and against any and all expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, in which Indemnitee was or is made
party or was or is involved by reason of the fact that Indemnitee is or was a
director or officer of the Company. Notwithstanding the foregoing, payments
of self-insurance under this Section to Indemnitee by the Company shall not
exceed the amount of $5,000,000 for any event and further shall be limited in
accordance with Section 5 hereof. An "event" as used in the preceding
sentence in reference to a limitation on self-insurance shall include the
same acts or omissions by Indemnitee and interrelated, repeated or continuous
acts or omissions.
4. Additional Indemnification.
Subject only to the exclusions set forth in Section 5 hereof, the Company
hereby agrees that it shall hold harmless and indemnify Indemnitee.
(a) against any and all expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably
incurred by Indemnitee in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including an action by or on behalf of
stockholders of the Company or by or in the right of the Company, to which
Indemnitee is, was or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that Indemnitee is, was or at any time
becomes a director, officer, employee or agent of the Company, or is or was
serving or at any time serves at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise; and
(b) otherwise to the fullest extent as may be provided to Indemnitee
by the Company under the non-exclusivity provisions of the Corporation Law.
5. Limitations on Additional Indemnification.
No indemnification pursuant to this Agreement shall be paid by the Company:
(a) in respect to any transaction if it shall be determined by the
Reviewing Party, or by final judgment or other final adjudication, that
Indemnitee derived an improper personal benefit;
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(b) on account of Indemnitee's conduct which is determined by the
Reviewing Party, or by final judgment or other final adjudication, to have
involved acts or omissions not in good faith, intentional misconduct or a
knowing violation of law; or
(c) if the Reviewing Party or a court having jurisdiction in the
matter shall determine that such indemnification is in violation of the
Certificate, the Bylaws or the law.
6. Advancement of Expenses.
In the event of any threatened or pending action, suit or proceeding in
which Indemnitee 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 Indemnitee the Company shall promptly pay to Indemnitee amounts to
cover expenses incurred by Indemnitee in such proceeding in advance of its
final disposition upon the receipt by the Company of (i) a written
undertaking executed by or on behalf of Indemnitee to repay the advance if it
shall ultimately be determined that Indemnitee is not entitled to be
indemnified by the Company as provided in this Agreement and (ii)
satisfactory evidence as to the amount of such expenses.
7. Repayment of Expenses.
Indemnitee agrees that Indemnitee shall reimburse the Company for all
reasonable expenses paid by the Company in defending any civil, criminal,
administrative or investigative action, suit or proceeding against Indemnitee
in the event and only to the extent that it shall be determined by final
judgment or other final adjudication that Indemnitee is not entitled to be
indemnified by the Company for such expenses under the provisions of the
Corporation Law or any applicable law.
8. Determination of Indemnification; Burden of Proof.
With respect to all matters concerning the rights of Indemnitee to
indemnification and payment of expenses under this Agreement or under the
provisions of the Certificate 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
Indemnitee. If under applicable law, the entitlement of Indemnitee to be
indemnified under this Agreement depends on whether a standard of conduct has
been met, the burden of proof of establishing that Indemnitee did not act in
accordance with such standard of conduct shall rest with the Company.
Indemnitee 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 Indemnitee 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
Indemnitee did not
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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.
9. 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 Indemnitee to
indemnification and payment of expenses under this Agreement or under the
provisions of the Certificate and the Bylaws; (ii) standard of conduct; and
(iii) evaluation of the reasonableness of amounts claimed by Indemnitee 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 Indemnitee and approved
by the Company, which approval shall not be unreasonably withheld, and who
has not otherwise performed services for Indemnitee or the Company.
10. Continuation of Indemnification.
All agreements and obligations of the Company contained herein shall
continue during the period that Indemnitee 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 Indemnitee 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
Indemnitee was a director or officer of the Company or serving in any other
capacity referred to herein.
11. Notification and Defense of Claim.
Promptly after receipt by Indemnitee of notice of the commencement of any
action, suit or proceeding, Indemnitee 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 Indemnitee of rights
hereunder and that omission by Indemnitee to so notify the Company shall not
relieve the Company from any liability which it may have to Indemnitee
otherwise than under this Agreement. With respect to any such action, suit or
proceeding as to which Indemnitee 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 Indemnitee. After notice from the Company to
Indemnitee of its election to so assume the defense thereof, the Company
shall not be liable to Indemnitee under this Agreement for any legal or
other expenses subsequently incurred by Indemnitee in
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connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Indemnitee 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 Indemnitee unless (i) the employment of counsel by
Indemnitee has been specifically authorized by the Company, such
authorization to be conclusively established by action by disinterested
members of the Board though less than a quorum; (ii) representation by the
same counsel of both Indemnitee and the Company would, in the reasonable
judgment of Indemnitee and the Company, be inappropriate due to an actual
or potential conflict of interest between the Company and Indemnitee 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 Indemnitee has advised Indemnitee in writing that such
counsel's representation of Indemnitee would likely involve such counsel in
representing differing interests which could adversely affect the judgment
or loyalty of such counsel to Indemnitee, 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 Indemnitee and the
Company reasonably concur in writing that such counsel is unacceptable.
(c) The Company shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any
action or claim in any manner which would impose any liability or penalty
on Indemnitee without Indemnitee's written consent. Neither the Company
nor Indemnitee shall unreasonably withhold consent to any proposed
settlement.
12. 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 Indemnitee to serve as a director or officer of the Company
and acknowledges that Indemnitee 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
Indemnitee has been received by the Company, Indemnitee may at any time
assert the claim and bring suit against the Company to recover the unpaid
amount of the claim. In the event
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Indemnitee 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 Indemnitee for all of Indemnitee's reasonable
attorneys' fees and expenses in bringing and pursuing such action.
13. Proceedings by Indemnitee.
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 Indemnitee 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 though less than a quorum or (ii)
was brought by Indemnitee pursuant to Section 12(b) hereof.
14. 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 to 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.
15. Non-exclusivity.
The rights of Indemnitee under this Agreement shall not be deemed
exclusive, or in limitation of, any rights to which Indemnitee may be
entitled under any applicable common or statutory law, or pursuant to the
Certificate, the Bylaws, a vote of the stockholders or otherwise.
16. Other Payments.
The Company shall not be liable to make any payment under this Agreement
in connection with any action, suit or proceeding against Indemnitee to the
extent Indemnitee has otherwise received payment of the amounts otherwise
payable by the Company hereunder.
17. 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 Indemnitee with respect thereto, and Indemnitee 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.
18. Survival; Continuation.
The rights of Indemnitee under this Agreement shall inure to the benefit
of Indemnitee, his heirs, executors, administrators, personal representatives
and assigns, and this Agreement shall be binding upon the Company, its
successors and assigns. The rights of Indemnitee under this Agreement shall
continue so long as Indemnitee may be subject to any action, suit or
proceeding because of the fact that Indemnitee is or was 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. 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
entities acquiring such property and assets shall become bound by and replace
the Company under this Agreement.
19. Amendment and Termination.
No amendment, modification, termination or cancellation of this Agreement
shall be effective unless made in writing signed by both parties hereto.
20. 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.
21. 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:
Dispatch Management Services Corp.
65 West 36th Street
New York, New York 10018
Attn: Chief Executive Officer
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with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1333 New Hampshire Avenue, N.W.
Washington, DC 20036
Attn: Bruce S. Mendelsohn
(b) if to the Indemnitee
Dispatch Management Services Corp.
65 West 36th Street
New York, New York 10018
Attn: [Indemnitee]
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.
22. 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 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.
23. 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.
24. 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.
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25. CHOICE OF LAW. THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW,
AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
DISPATCH MANAGEMENT SERVICES CORP.
By:________________________________
Linda Jenkinson
Chief Executive Officer
_______________________________
__________________, Indemnitee
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