EXHIBIT 10.4
FORM OF
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") is made as of this
_____ day of January, 1999, by and between HARVEYS ACQUISITION CORPORATION, a
Nevada corporation (the "Company"), and ________ ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the substantial level of
corporate litigation in general, subjecting officers, directors and key
employees to expensive litigation risks while the availability and coverage
of liability insurance is severely limited;
WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve as officers,
directors and key employees of the Company and to indemnify its officers,
directors and key employees so as to provide them with the maximum protection
permitted by law.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the Company and Indemnitee hereby agree as
follows:
l. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative, or investigative, (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee or a person
of whom Indemnitee is the legal representative 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 the Indemnitee while an
officer, director, or key employee, or by reason of the fact that Indemnitee
is or was serving at the request of the Company as an officer, director,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, to the fullest extent permitted by law, against all
expenses, liability and loss (including attorney fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by
Indemnitee in connection with the action, suit or proceeding.
The indemnification above provided shall include, but not be limited to,
reimbursement of all fees, including amounts paid in settlement and
attorneys' fees actually and reasonably incurred, in connection with the
defense or settlement of any action or suit if
1
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, with
respect to any criminal action or proceeding, had no reasonable cause to
believe Indemnitee's conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, and that with respect to any criminal
action or proceeding, he or she had no reasonable cause to believe that
Indemnitee's conduct was unlawful.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened
to be made a party to or is involved in any action, suit, or 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 or a person of
whom indemnitee is the legal representative 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 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
corporation, partnership, joint venture, trust or other enterprise, to the
fullest extent permitted by law, against all expenses, liability and loss
(including attorneys fees, judgments, fines and amounts paid in settlement)
in each case, to the extent actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of such action, suit, or 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 shareholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged by
a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the Company or for amounts paid in settlement to the Company
in the performance of Indemnitee's duty to the Company and its shareholders
unless and only to the extent that the court in which such action, suit or
proceeding is or was pending shall determine upon application that, in view
of all of the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such expenses as the court deems and then only to
the extent that the court shall determine.
2. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. The Company shall advance all
expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action or proceeding
referenced in Section 1(a) or (b) hereof (but not amounts actually paid in
settlement of any such action or proceeding) and to the extent consistent
with the Articles of Incorporation and Bylaws of the Company. Indemnitee
hereby undertakes to repay such amounts advanced if, and to the extent that,
it shall ultimately be determined by a court of competent jurisdiction that
Indemnitee is not entitled to be indemnified by the Company as authorized
hereby. The advances to be made hereunder shall be paid by the Company to
Indemnitee within twenty (20) days following delivery of a written request
therefor by Indemnitee to the
2
Company.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a
condition precedent to Indemnitee's right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
claim made against Indemnitee for which indemnification will or could be
sought under this Agreement. Notice to the Company shall be directed to the
President/Chief Executive Officer of the Company, with a copy to the
Company's counsel, at the addresses shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). Notice shall be deemed received three business days after the
date postmarked if sent by domestic, certified or registered mail, properly
addressed; otherwise notice shall be deemed received when such notice shall
actually be received by said parties. In addition, Indemnitee shall give the
company such information and cooperation as it may reasonably require as
shall be within Indemnitee's power.
(c) PROCEDURE. Any indemnification provided for in Section 1
shall be made no later than forty-five (45) days after receipt of the written
request of Indemnitee. If a claim under this Agreement, under any statute or
under any provision of the Company's Articles of Incorporation or Bylaws
providing for indemnification is not paid in full by the Company within
forty-five (45) days after a written request for payment therefor has first
been received by the company, then Indemnitee may, but need not, at any time
thereafter bring an action against the Company to recover the unpaid amount
of the claim and, subject to Section 14 of this Agreement, Indemnitee shall
also be entitled to be paid for the expenses (including attorneys' fees) of
bringing such action. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in connection with
any action or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible under
applicable law or this Agreement for the Company to indemnify Indemnitee for
the amount claimed, but the burden of proving such defense shall be on the
Company, and Indemnitee shall be entitled to receive interim payments of
expenses pursuant to Subsection 3(a) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists. It is the parties intention that if the Company contests
Indemnitee's right to indemnification, the question of Indemnitee's right to
indemnification shall be for the court to decide, and neither the failure of
the Company (including its Board of Directors, any committee or subgroup of
its Board of Directors, its independent legal counsel or its shareholders) to
have made a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct
required by the applicable law or this Agreement, nor an actual determination
by the Company (its Board of Directors, any committee or subgroup, its Board
of Directors, its independent legal counsel or its shareholders) that
Indemnitee has not met such applicable standard of conduct, shall create a
presumption that Indemnitee has or has not met the applicable standard of
conduct.
(d) NOTICE TO INSURERS. If, at the time of the receipt of a
notice of a claim pursuant to section 3(b) hereof, the Company has director
and officer liability insurance in effect, then 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
3
take all necessary or appropriate 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.
(e) SELECTION OF COUNSEL. If the Company shall be obligated under
Section 3(a) hereof to pay the expenses of any proceeding against Indemnitee,
then the Company, if appropriate, shall be entitled to assume the defense of
such proceeding, with counsel approved by Indemnitee, which approval shall
not be unreasonably withheld, 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
Indemnitee's counsel in any such proceeding at Indemnitee's expense; and
(ii) if (A) the employment of counsel by Indemnitee has been previously
authorized 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 or (C) the Company shall not 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.
3. ADDITIONAL INDEMNIFICATION OF RIGHTS; NONEXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this Agreement,
the Company hereby agrees to indemnify Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the
Company's Articles of Incorporation, the Company's Bylaws or by statute. In
the event of any change, after the date of this Agreement, in any applicable
law, statute or rule which expands the right of a Nevada corporation to
indemnify a member of its board of directors or an officer, such changes
shall be, ipso facto, within the purview of Indemnitee's rights and Company's
obligations, under this Agreement. In the event of any change in any
applicable law, statute or rule which narrows the right of a Nevada
corporation to indemnify a member of its Board of Directors or an officer,
such statute or rule to be applied to this Agreement shall have no effect on
this Agreement or the parties, rights and obligations hereunder.
(b) NONEXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may
be entitled under the Company's Articles of Incorporation, its Bylaws, any
agreement, any vote of shareholders or disinterested directors, the General
Corporation Law of the State of Nevada (the "NGCL") or otherwise, both as to
action in Indemnitee's official capacity and as to action in another capacity
while holding such office. The indemnification provided under this Agreement
shall continue as to the Indemnitee for any action taken or not taken while
serving in an indemnified capacity even though Indemnitee may have ceased to
serve in such capacity at the time of any action or other covered proceeding.
4. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments,
4
fines, penalties actually or reasonably incurred by Indemnitee on
investigation, defense, appeal or settlement of any civil or criminal action
or proceeding, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or penalties to which Indemnitee is entitled.
5. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, U.S. Federal law or applicable public policy may
prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. Indemnitee understands and acknowledges that the
Company has undertaken or may be required in the future to undertake with the
Securities and Exchange 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.
6. DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Company shall,
from time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain a policy or policies of
insurance with reputable insurance companies providing the officers and
directors of the Company with coverage for losses from wrongful acts, or to
ensure the Company's performance of its indemnification obligations under
this Agreement. Among other considerations, the Company will weigh the costs
of obtaining such insurance coverage against the protection afforded by such
coverage. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain such insurance if the Company determines in
good faith that such insurance is not reasonably available, if the premium
costs for such insurance are disproportionate to the amount of coverage
provided, if the coverage provided by such insurance is limited by exclusions
so as to provide an insufficient benefit or if Indemnitee is covered by
similar insurance maintained by a subsidiary or parent of the Company.
7. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court
order, to perform its obligations under this Agreement shall not constitute a
breach of this Agreement. The provisions of this Agreement shall be severable
as provided in this Section 7. If this Agreement or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify Indemnitee to the full extent permitted
by any applicable portion of this Agreement that shall not have been
invalidated, and the balance of this Agreement shall not have been so
invalidated and the balance of this Agreement not so invalidated shall be
enforceable in accordance with its terms.
8. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) EXCLUDED ACTS. To indemnify Indemnitee for any acts or
omissions or transactions from which a director or officer may not be
relieved of liability under the NGCL;
5
(b) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise
as required under Section 78.751 of the NGCL or the Articles of Incorporation
or Bylaws of the Company, but such indemnification or advancement of expenses
may be provided by the Company in specific cases if the Board of Directors
has approved the initiation or bringing of such suit;
(c) LACK OF GOOD FAITH. To indemnify Indemnitee for any expenses
incurred by Indemnitee with respect to any proceedings instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by
Indemnitee in such proceeding was not made in good faith or was frivolous;
(d) INSURED CLAIMS. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including 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 director and
officer liability insurance maintained by the Company; or
(e) CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for
expenses and 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, or any similar successor statute.
9. EFFECTIVENESS OF AGREEMENT. To the extent that the indemnification
permitted under the terms of certain provisions of this Agreement exceeds the
scope of the indemnification provided for in the NGCL, such provisions shall
not be effective unless and until the Company's Articles of Incorporation or
Bylaws authorize such additional rights of indemnification. In all other
respects, the balance of this Agreement shall be effective as of the date set
forth on the first page and may apply to acts or omissions of Indemnitee
which occurred prior to such date if Indemnitee was an officer, director,
employee or other agent of the Company, 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 at the time such act or
omission occurred.
10. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to "Company" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees
or agents, so that if Indemnitee is or was a director, officer, employee, or
agent of such constituent corporation or is or was serving at the request of
such constituent corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise,
then Indemnitee shall
6
stand in the same position under the provisions of this Agreement with
respect to the resulting or surviving corporation as Indemnitee would have
with respect to such constituent corporation if its separate existence had
continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on Indemnitee with respect to an
employee benefit plan; and references to "serving at the request of the
Company" shall include any service as a director, officer, employee or agent
of the Company which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants or its beneficiaries.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, and all of which
shall constitute one and the same agreement.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of and be enforceable 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 or substantially all, or a substantial part of the business or assets
of the Company, by written agreement in the 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,
officer, or agent of the Company or of any other enterprise at the Company's
request.
13. ATTORNEYS FEES. In the event that any action is instituted by the
Indemnitee under this Agreement to enforce or interpret any of the terms
hereof, Indemnitee shall be entitled to be paid all court costs and expenses,
including reasonable attorneys' fees, incurred by Indemnitee with respect to
such action, unless as a part of such action, the court determines that each
of the material assertions made by Indemnitee as a basis for such action were
not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to
enforce or interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be paid all court costs and expenses, including attorneys fees,
incurred by Indemnitee in defense of such action (including with respect to
Indemnitee's counterclaims and cross-claims made in such action), unless as a
part of such action the court determines that each of Indemnitee's material
defenses to such action were not made in good faith or were frivolous. In
the event of an action instituted by or in the name of the company under this
Agreement or to enforce or interpret any of the terms of this Agreement,
Indemnitee shall be entitled to be paid all court costs and expenses,
including attorneys' fees, incurred by Indemnitee in defense of such action
(including with respect to Indemnitee's counterclaims and cross-claims made
in such action), unless as a part of such action, the court determines that
each of Indemnitee's material defenses to such action were not made in
7
good faith or were frivolous.
14. NOTICE. 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 addressee 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.
15. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction and venue of the courts of the County
of Douglas, State of Nevada for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above-written.
HARVEYS CASINO RESORTS
P.O. Box 128
Highway 50 and Stateline Avenue
Stateline, Nevada 89449
By:________________________________
________________________________
Chairman of the Board
With a copy to:
___________________________________
___________________________________
___________________________________
AGREED TO AND ACCEPTED: INDEMNITEE:
___________________________________
Address:___________________________
___________________________________
8