AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
THE SERVICEMASTER COMPANY
(amended as of May 9, 2005)
ARTICLE ONE
NAME
1.1 The name of the corporation is:
The ServiceMaster Company
The corporation was originally incorporated under the name "ServiceMaster
Incorporated of Delaware" by means of a Certificate of Incorporation filed on
September 11, 1991.
ARTICLE TWO
REGISTERED OFFICE AND REGISTERED AGENT
2.1 The address of the corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, Delaware 19801. The name of its
registered agent at such address is Corporation Trust Company. The corporation's
books, records, documents and other papers may be maintained outside the State
of Delaware.
ARTICLE THREE
RESERVED
ARTICLE FOUR
PURPOSE
4.1 The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
ARTICLE FIVE
AUTHORIZED SHARES
5.1 Authorized Shares. The total number of shares of capital
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stock which the corporation has authority to issue is
1,011,000,000 shares, consisting of:
(1) 11,000,000 shares of Preferred Stock, par value $.01 per
share (the "Preferred Stock"); and
(2) 1,000,000,000 shares of Common Stock, par value $0.01 per
share (the "Common Stock").
5.2 Preferred Stock. Shares of Preferred Stock may be issued from time
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to time in one or more series. The Board of Directors of the
corporation is hereby authorized to determine and alter all rights, preferences
and privileges and qualifications, limitations and restrictions thereof
(including, without limitation, voting rights and the limitation and exclusion
thereof) granted to or imposed upon any wholly unissued series of Preferred
Stock and the number of shares constituting any such series and the designation
thereof, to determine whether fractional shares can be issued in any particular
series and, if so, the nature of the fractional interests which can be issued in
that series, and to increase or decrease (but not below the number of shares of
such series then outstanding) the number of shares of any series subsequent to
the issue of shares of that series then outstanding. In case the number of
shares of any series is so decreased, the shares constituting such reduction
shall resume the status which such shares had prior to the adoption of the
resolution originally fixing the number of shares of such series.
5.3 Common Stock. Shares of Common Stock may be issued from time
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to time in accordance with the provisions of this Section 5.3.
5.3.1 Voting Rights. Except as otherwise required by
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applicable law, holders of Common Stock shall be entitled to one vote
per share on all matters to be voted on by the stockholders of the
corporation.
5.3.2 Dividends. Subject to the provisions of the Preferred
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Stock, as and when dividends are declared or paid thereon, whether in
cash, property or securities of the corporation, the holders of Common
Stock shall be entitled to participate in such dividends ratably on a
per share basis.
5.3.3 Liquidation. Subject to the provisions of the Preferred
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Stock, the holders of the Common Stock shall be entitled to participate
ratably on a per share basis in all distributions to the holders of
Common Stock in any liquidation, dissolution or winding up of the
corporation.
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5.4 Definition of Voting Class and Common Voting Class. If only one
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class of stock is entitled to be voted on any particular issue on which a
stockholder vote is taken at any particular meeting of the stockholders,
the term "voting class" as used in this Certificate refers to that class when it
is applied to that particular issue. If shares in two or more classes are to be
voted together without separate class votes on any particular issue at any
particular meeting of the stockholders, then all of those classes shall be
deemed to constitute a single "voting class" for purposes of that issue. The
voting class which consists of or includes the Common Stock shall be deemed the
"common voting class."
ARTICLE SIX
EXISTENCE
6.1 The corporation shall have perpetual existence.
ARTICLE SEVEN
DIRECTORS
7.1 Total Number of Directors. The number of directors of this
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corporation shall be determined in the manner prescribed in the Bylaws
of the corporation, except that such number shall not be less than three.
7.2 Classification. The directors of this corporation shall be divided
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into three classes having terms so that (i) each class shall come
up for election by stockholders every three years, (ii) one class of directors
shall come up for election in every calendar year beginning with calendar year
1998, and (iii) not more than one class of directors shall come up for election
in any calendar year. Each of the three classes of directors established by this
Article Seven shall be designated at any given time by the calendar year in
which such class next comes up for election after the given time. The term
"triennial election" when applied to any particular class of directors means the
election by stockholders of persons to fill all directorship positions in that
class existing at the time of such election which shall occur in a calendar year
in which positions in that class come up for election provided that if for any
reason no election by stockholders of persons to fill all directorship positions
in that class existing at the time of such election shall occur in a calendar
year in which positions in such class come up for election, then (i) the
stockholders shall be entitled to act once at any time after the conclusion of
that year and prior to the year in which that class next comes up for election
to elect persons to fill all directorship positions in that class existing at
the time of such election and (ii) any election which shall occur in accordance
with clause (i) shall be deemed to be a "triennial election "for that particular
class.
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7.3 Term. Each person elected to the Board shall be deemed elected for
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a period (which shall be deemed a "term") beginning at the time of such election
and ending after the earliest of (i) the next triennial election of directors in
the class to which the director shall have been elected which first occurs after
such director's election, (ii) the resignation of such person from the Board or
from a position on the Board in the class to which he shall have been elected in
such election, (iii) the death of such person, or (iv) the removal of such
person from the Board in accordance with this Certificate of Incorporation and
applicable law. A person elected to the Board shall cease to be a director at
the end of the term to which he or she has been elected (the "old term") unless
such person shall have been separately elected to a new term beginning at the
end of the old term. A person shall be deemed to be a "sitting director" at all
times during each term during which he or she shall serve on the Board (and
without limiting by implication the provisions in the first sentence of this
Section 7.3, a person shall be deemed to cease to be a "sitting director" at the
earliest time after any election of such person to the Board at which an event
described in clauses (i)-(iv) in the first sentence in this Section 7.3 shall
occur unless the person shall have been elected prior to the time to a new term
beginning not later than that time and continuing after that time).
7.4 Number of Positions in Each Class. The number of positions in each
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class of directors shall be determined as prescribed in the Bylaws of the
corporation. If the number of positions in any class of directors shall be
reduced at any time which does not coincide with triennial election for that
class, then any person who was elected as a director in the class which has been
reduced may, by the affirmative vote of a majority of the sitting directors,
be removed from his or her position as a director, with such removal being
effective on the date on which such majority takes such action. The removal of
a director pursuant to the preceding sentence shall not create a vacancy on the
Board. If the number of positions in any class of directors shall be
reduced at any time which does not coincide with triennial election for that
class and a majority of the sitting directors does not take the action
described in the preceding provisions of this Section 7.4, then: (i)
such action shall not shorten the term of any incumbent member of such class;
(ii) the effectiveness of the reduction in the number of positions in such class
shall be delayed to the extent necessary to enable each director service in such
class to complete the term such director shall be serving at the time of such
reduction; (iii) accordingly such reduction shall become fully effective not
later than the next triennial election of directors in that class which shall
occur after such reduction; and (iv) the persons elected in that triennial
election to fill such reduced number of positions shall be deemed to be the
successors to all persons who shall have previously held positions in such
class.
7.5 Independent Director Requirement.
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7.5.1. Independent Majority Requirement. Subject to Section 7.5.6, no
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person shall be elected to any given term on the Board unless either
(i) such person would be an "independent director" during that term
under the standard prescribed in Section 7.5.2 or (ii) immediately after
giving effect to such election, a majority of the sitting directors
would be independent directors under the standard prescribed in
Section 7.5.2.
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7.5.2. Independent Director. A person shall be an "independent
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director" during the entirety of any term of service on the Board if he or
she satisfies all of the following conditions: (i) he or she shall affirm
that at the time of his or her election for that term that he or she is
independent under the standard prescribed in Section 7.5.3, (ii) he or she
shall agree to serve only in the capacity of independent director for that
term and (iii) prior to such person's election for that term no conclusion
shall have been reached by an Independent Board Majority under clause (iv)
of Section 7.5.3 which precludes that person from being independent, under
the standards set forth in Section 7.5.3, at the time of such election.
7.5.3. Independence Standard. A person shall be deemed "independent"
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at any given time if: (i) such person shall not have been employed by any
ServiceMaster Unit (as defined in Section 7.5.5) within one year prior to
the given time; (ii) such person shall not be a "Related Person" (as
hereinafter defined) at the given time and shall not have been employed by
a Related Person within one year prior to the given time; (iii) such person
shall not be a party at the given time to any agreement, requirement or
arrangement under which such person may be obligated to act in his or her
capacity as a director in accordance with instructions provided by any
person who is not independent at the given time (including, but not limited
to, a Related Person); and (iv) an Independent Board Majority (as defined
in Section 7.5.5) shall not have concluded at or prior to the given time
that such person is subject to any relationship, arrangement or
circumstance (including any relationship with a Related Person) which, in
the judgment of such Independent Board Majority, it is reasonably possible
will interfere to an extent deemed unacceptable by such Independent Board
Majority with such person's exercise of independent judgment as a director.
7.5.4. Removal Right.
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7.5.4.1 If an Independent Board Majority (determined as
prescribed in Section 7.5.5) shall in their sole discretion determine
that any person serving as an independent director either did not meet
the standards for independence specified in Section 7.5.3 at the time
such person was elected to the particular term in which that person
shall be serving at the time such determination shall be made or is
not independent under the standards prescribed in Section 7.5.3
(whether by reason of any finding made pursuant to clause (iv) in the
first sentence in Section 7.5.3 after such person's election or for
any other reason), then the Independent Board Majority shall have the
right to remove such person from the Board at any time during the
particular term.
7.5.4.2 The removal of a director pursuant to Section 7.5.4.1
shall be effective upon the delivery to Chief Executive Officer of
this corporation of a written document signed by all of the members of
the Independent Board Majority in which such persons (i) make the
determination required for removal by the preceding sentence and (ii)
elect to remove the director.
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7.5.4.3 In no event shall an Independent Board Majority or anyone
else have the right or power under or by reason of this Section 7.5.4
to remove any particular person from the Board unless that particular
person shall have agreed in writing to serve in the capacity of
independent director for the term during which such removal would
occur.
7.5.5. Definitions. Each of the terms defined in this Section 7.5.5
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has the meaning set forth in this Section 7.5.5 whenever such term is used
in this Certificate of Incorporation.
Related Person. The term "Related Person" has the meaning set forth in
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Section 8.2, the provisions of which are incorporated in this Article Seven
by reference. A person shall be deemed a "Related Person" for purposes of
this Article Seven if such person constitutes a Related Person at the time
as of which the term shall be applied under the terms of the Certificate of
Incorporation governing this corporation as constituted at that time.
Beneficially Owns. The term "Beneficially Owns has the meaning set
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forth in Section 8.2
Independent Board Majority. The term "Independent Board Majority"
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means a majority of the group comprised of all individuals who are
independent sitting directors at the time at which the term shall be
applied.
ServiceMaster Unit. Each of the following shall be deemed to be a
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"ServiceMaster Unit" for the purpose of this Certificate of Incorporation:
this corporation and any corporation, partnership (limited or general),
limited liability company or other entity which this corporation shall have
the power to control, either directly or indirectly.
7.5.6 Inapplicability of Section 7.5.1 in Certain Cases. Anything in
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this Section 7.5 to the contrary notwithstanding, the provisions of Section
7.5.1 shall not apply to the election of a person as a director of the
Corporation if, at the time of such election, a Related Person Beneficially
Owns at least eighty percent (80%) of the shares of Common Stock which were
outstanding at the time at which the vote on such person shall occur.
7.6 Vacancies. Any vacancy in any position in any class which shall occur
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between triennial elections of directors in that class for any reason
(including, but not limited to, any reason specified in clauses (ii)-(iv) in the
first sentence in Section 7.3 or any increase in the number of positions in that
class made pursuant to this corporation's Bylaws) may be filled by a person
elected by the affirmative vote of a majority of the sitting directors at the
time of such election.
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7.7 Termination of Directorship in the Case of Persons Who Cease to be
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Officers. If a person is elected as a director at a time when he or she is an
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officer of the Corporation and if, during the term of such person as a director
he or she ceases to hold any of the officership positions with the Corporation,
such person's term and position as a director shall automatically end when such
person ceases to be an officer of the Corporation. The Board may, in its
discretion, fill such vacancy by electing the person who was removed pursuant to
the preceding provisions of this Section 7.7.
7.8 Removal: General Limitations. Except as otherwise provided in Section
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7.4, Section 7.5.4 and Section 7.7, no person may be removed from the Board
prior to the time such person's term would end but for such removal unless (i)
such removal shall be for cause and (ii) such removal shall be approved by the
record holders of the shares representing sixty-seven percent (67%) of the votes
attributable to shares in the common voting class outstanding at the record date
used to determine the stockholders entitled to vote on such matter.
7.9 Stockholder Election Requirements. Each election of directors by
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stockholders shall be by plurality vote except that an individual shall not be
elected to the Board if such election is prohibited by Section 7.5.1 or the
individual does not meet the qualifications which may be required by this
Corporation's Bylaws as constituted at the time of such election. The Board
shall have the right to adopt Bylaw provisions to implement and apply the
provisions in the preceding sentence and to achieve the outcome prescribed in
the preceding sentence. Election of Directors need not be by written ballot
unless the Bylaws of this Corporation shall so provide.
ARTICLE EIGHT
CERTAIN BUSINESS COMBINATIONS
8. Stockholder Vote Required for Approval of Certain Business Combinations
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8.1 80% Requirement. The affirmative vote of the holders of not less
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than eighty percent (80%) of the outstanding shares of the Common Stock
held by stockholders other than a "Related Person" (as hereinafter defined)
shall be required for the approval or authorization of any "Business
Combination" (as hereinafter defined) of the corporation with any Related
Person; provided, that the foregoing 80% voting requirement shall not be
applicable if an Independent Board Majority (as defined in Section 7.5.5)
either (a) has expressly approved in advance the acquisition of the
outstanding shares of Common Stock that caused such Related Person to
became a Related Person or (b) has expressly approved such Business
Combination either in advance of or subsequent to such Related Person's
having become a Related Person.
8.2 Definitions. Each of the terms defined in this Section 8.2 has the
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meaning set forth in this Section 8.2 whenever such term is used in this
Certificate of Incorporation:
Business Combination. The term "Business Combination" shall mean
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(a) any merger or consolidation of this corporation or a subsidiary of
this corporation with or into a Related Person; (b) any sale, lease,
exchange, transfer or other disposition of all or any Substantial Part
(hereinafter defined) of the assets either of the corporation
(including without limitation any voting securities of a subsidiary)
or of a subsidiary of the corporation to a Related Person; (c) any
merger or consolidation of a Related Person with or into this
corporation or a subsidiary of this corporation; (d) any sale, lease,
exchange, transfer or other disposition of all or any Substantial Part
of the assets of a Related Person to this corporation or a subsidiary
of this corporation; (e) the issuance of any securities of this
corporation or a subsidiary of this corporation to a Related Person;
(f) any recapitalization that would have the effect of increasing the
voting power of a Related Person; and (g) any agreement, contract or
other arrangement providing for any of the transactions described in
this definition of a Business Combination.
Exchange Act. The term "Exchange Act" means the Securities
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Exchange Act of 1934 as in effect on the Filing Date or at any time
thereafter.
Filing Date. The term "Filing Date" has the meaning set forth in
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Section 10.1.
Beneficially Owns. The term "Beneficially Owns" has the meaning
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set forth in Rule 13d-3 of the General Rules and Regulations as
promulgated under the Exchange Act and as in effect on the Filing
Date.
Affiliates and Associates. The terms "Affiliates" and
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"Associates" have the meaning set forth in Rule 12b-2 of the General
Rules and Regulations as promulgated under the Exchange Act and as in
effect on the Filing Date.
Related Person. The term "Related Person" shall mean and include
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(i) any individual, corporation, partnership or other person or entity
which, together with its Affiliates and Associates, Beneficially Owns
in the aggregate fifteen percent (15%) or more of the outstanding
Common Stock, and (ii) any Affiliate or Associate of any such
individual, corporation, partner or other person or entity.
Substantial Part. The term "Substantial Part" shall mean more
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than twenty percent (20%) of the fair market value as determined by
the Independent Board Majority of the total consolidated assets of
this corporation and its subsidiaries taken as a whole as of the end
of its most recent fiscal year ended prior to the time that such
determination is being made.
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8.3 Beneficial Ownership of Common Stock. Without limitation, any share of
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Common Stock that any Related Person has the right to acquire at any time
(notwithstanding that Rule 13d-3 deems such shares to be beneficially owned only
if such right may be exercised within 60 days) pursuant to any agreement, or
upon the exercise of conversion rights, warrants or options or otherwise, shall
be deemed to be Beneficially Owned by the Related Person and to be outstanding
for purposes of the definition of "Related Person."
ARTICLE NINE
BYLAWS
9.1 Scope of Bylaws. The Bylaws of this corporation shall govern the
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management and affairs of this corporation, the rights and powers of the
directors, officers, employees and stockholders of this corporation in
accordance with their terms and shall govern the rights of all persons concerned
relating in any way to this corporation except that if any provision in the
Bylaws shall be irreconcilably inconsistent with any provision in this
Certificate of Incorporation, the provision in this Certificate of Incorporation
shall control. Without limiting by implication the generality of the preceding
provisions: (i) meetings of the holders of the Common Stock may be called by the
persons and in the manner provided from time to time in the corporation's
Bylaws, and may not be called by the holders of the outstanding Common Stock of
the corporation except to the extent (if any) expressly permitted by the Bylaws
of the corporation; (ii) holders of the Common Stock or any other class or
series of stock the corporation may not take action by consent in lieu of a
meeting of stockholders except to the extent (if any) expressly permitted by the
Bylaws of the corporation; (iii) the Bylaws may prescribe qualifications which
must be met for an individual to qualify for election to the Board (including
but not limited to a requirement that the individual's candidacy and information
about the individual be provided to the Board prior to a deadline established by
the Bylaws); (iv) the Bylaws may prescribe requirements which must be satisfied
in order to entitle any person to obtain a vote on any proposal at any meeting
of the stockholders which is not endorsed by the Board (including but not
limited to a requirement that the proposal and information about the proposal be
provided to the Board prior to a deadline established by the Bylaws) and may
prohibit a vote at any special meeting of the stockholders upon any proposal not
endorsed by the Board and (v) the Bylaws may identify special issues which shall
not be deemed to have been approved unless they receive a higher vote by the
Board and/or by stockholders than would otherwise be required and may prescribe
the vote required for approval of the issues so identified.
9.2 Power to Amend or Replace the Bylaws. The directors of the corporation
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shall have the power to amend or replace the Bylaws of the corporation. The
holders of the Common Stock of the corporation shall not have the power to amend
or replace the Bylaws of this corporation unless such amendment or replacement
shall be approved by the record holders of eighty percent (80%) of the votes
attributable to shares in the common voting class outstanding at the record date
used to determine the stockholders entitled to vote on such amendment or
replacement.
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ARTICLE TEN
LIMITATION ON DIRECTORS' AND OFFICERS' PERSONAL LIABILITY
10.1 Basic Standard. No person shall have any liability of any kind by
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reason of Relevant Loss (defined below) caused in whole or in part by any act or
failure to act which shall have occurred while such person shall have been an
officer or director of the corporation except: (i) obligations arising under the
express terms of any written contract to which such person is a party; (ii) the
obligation to return to the corporation an amount up to the value actually
realized by such person by stealing or by any other action which constitutes a
criminal felony; (iii) any liability imposed by contract or applicable law which
is founded on, arises from or is related to activities by such person (or such
person's agents or affiliates) which are in competition with any business of the
corporation or any of its Affiliates; and (iv) any other liability from which it
shall not be possible to exempt such person under applicable law either as
constituted on the date on which this Amended and Restated Certificate of
Incorporation is filed with the Secretary of State of Delaware (the "Filing
Date") or at any time thereafter. The term "Relevant Loss" designates and
includes any loss, damage or expense of any kind (i) experienced for any reason
by the corporation or by any entity controlled by the corporation (ii) which any
person may experience by reason of any purchase (or failure to purchase),
maintenance of an interest in, sale (or failure to sell) or failure to obtain
payment of any amount due on any note, debenture, preferred stock, common stock
or other security issued or issuable by the corporation or (iii) which shall
otherwise be caused in whole or in part by or arise in connection with (or would
not have occurred but for) such person's service as a director or officer of the
corporation. Without limiting by implication the generality of the preceding
provisions in this Section 10.1, every director of the corporation shall be
exempt (except to the extent expressly set forth below) from any personal
liability to the corporation or any of the corporation's stockholders for
monetary damages for breach of fiduciary duty as a director to the fullest
extent permitted by (i) Section 102(b)(7) of the General Corporation Law of the
State of Delaware as constituted on the Filing Date or (ii) any provision of the
law of the State of Delaware as constituted at any time after the December 11,
1991.
10.2 Amount of Liability. The maximum liability to which any person shall
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be obligated to pay with respect to any liability which such person shall have
under clauses (ii) or (iv) in the first sentence in Section 10.1 shall be an
amount equal to the value of the personal benefit wrongfully realized by such
person by means of the act or failure to act giving rise to such liability.
10.3 Effect of Change in Law. In the event there shall after December 11,
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1991 be any change in any law relevant to the extent to which a person may be
exempted from liability by reason of any act or failure to act which occurs
while such person shall be an officer or director of the corporation, then (i)
if such change permits a broader exemption than permitted prior to such change,
the exemption provided by this Article Ten shall automatically be increased to
the fullest extent which is permitted by such change and is not precluded by any
of the express provisions in clauses (i), (ii), (iii) or (iv) of the first
sentence of Section 10.1 and (ii) if such change reduces the amount of the
exemption from liability it is possible to grant or provide to a director or
officer, this
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Article Ten shall be construed to eliminate or minimize as much as
possible the extent to which such change shall reduce the protection provided by
this Article Ten. Whenever possible, each provision in this Article Ten shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Article Ten shall be held to be prohibited by or
invalid under applicable law, then (i) such provision shall be applied to
accomplish the objectives of the provision as originally written to the fullest
extent permitted by law and (ii) all other provisions in this Article Ten shall
remain in full force and effect.
10.4 Amendment of this Article Ten. The terms in this Article Ten are
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expressly intended to constitute a contract between the corporation and each
person who shall at any time serve as an officer or director of the corporation.
Each person who shall at any time serve as an officer or director of the
corporation shall be entitled to rely (and shall be conclusively presumed to
have relied) upon the protection provided by this Article Ten. No amendment or
repeal of this Article Ten or of any other provision in this Certificate of
Incorporation, no merger of the corporation into any other corporation, no
liquidation or dissolution of the corporation or any other development of any
kind shall diminish in any way the extent of the protection provided by this
Article Ten with respect to any act or failure to act which shall have occurred
prior to such amendment, repeal, merger, liquidation, dissolution or other
development.
ARTICLE ELEVEN
INDEMNIFICATION
11.1 Covered Service.
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11.1.1 Basic Scope. The term "Covered Service" designates and
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includes: (a) service as a director or officer of the corporation; (b)
service by a person while he or she is an officer or director of the
corporation (i) as an agent or representative of the corporation, (ii) in
any other capacity with the corporation, (iii) as a director, officer,
employee, agent or representative of, or in any other capacity with, any
Affiliate, (iv) in any capacity with any Employee Plan, and (v) in any
other capacity in which such person shall have been asked to serve by the
corporation's Board of Directors or Chief Executive Officer; (c) any
services which constituted "Covered Service" under the Amended and Restated
Agreement of Limited Partnership for ServiceMaster Limited Partnership; and
(d) any other service of any kind by any person with any organization or
entity of any kind (whether or not affiliated with the corporation) which
shall be designated in writing as Covered Service by a majority of the
members of the corporation's Board of Directors or by the corporation's
Chief Executive Officer. Service shall be deemed to constitute "Covered
Service" if it is so designated by the terms in the preceding sentence
regardless of whether it shall have been performed prior to, at, or after
the time this Article Eleven shall have become part of the corporation's
Certificate of Incorporation. Any person shall be entitled to rely upon any
written confirmation provided by the Corporation's Chief Executive Officer
or by the
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Corporation's Board of Directors that service by such person in
any capacity specified in such confirmation will constitute Covered Service
and to rely upon the protection afforded by this Article Eleven in
connection with such service. In no event shall the failure to obtain any
written confirmation that any service is covered by this Article Eleven
take away or in any way impair the right of the person providing such
service to receive any payment under this Article Eleven if such person is
entitled to receive such payment in connection with such service under the
provisions in this Article Eleven.
11.1.2 Officer. Service in any of the following capacities shall be
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deemed to be service as an officer of the corporation: Chairman of the
Board of Directors; Vice Chairman of the Board of Directors; President;
Chief Executive Officer; Chief Operating Officer; Executive Vice President;
Senior Vice President; Vice President; Chief Financial Officer; Chief
Accounting Officer; General Counsel or Chief Legal Officer; Secretary,
Treasurer; or Controller; or President or Chief Operating Officer of any
Affiliate.
11.1.3 Affiliate. Any corporation or other entity shall be deemed to
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be an "Affiliate" for purposes of this Article Eleven if the corporation or
other entity shall (i) be a subsidiary of the corporation or otherwise be
controlled directly or indirectly by the corporation, (ii) have the right
or power to control the corporation, or (iii) be controlled by the same
corporation, entity or group which controls the corporation.
11.1.4 Employee Plan. The term "Employee Plan" whenever it is used in
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this Article Eleven designates and includes: (i) any pension plan, employee
stock ownership plan, profit sharing plan, option plan or other plan or
program established to benefit any employees of the corporation, any
Affiliate, or any predecessor of the corporation or any Affiliate and (ii)
any trust or other entity which shall hold any assets for any Employee
Plan.
11.2 General Indemnification Right. Except as otherwise provided in Section
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11.3, the corporation shall indemnify any person against, and shall reimburse
such person for any amount which such person shall pay to satisfy, settle or
otherwise deal with, any attempt to impose any liability or obligation of any
kind upon such person if such attempt or such liability or obligation or both
shall arise in connection with or by reason of, or would not have arisen but
for, Covered Service by such person (or any agreement by such person to serve as
a director or officer of the corporation or to provide other Covered Service)
including, but not limited to: (i) any claim resulting from any loss, injury,
damage, harm or other disadvantage which the corporation, any Affiliate, any
Employee Plan or any person who acquires, holds, or disposes of any interest in
any security issued by the corporation suffers or is alleged to have suffered;
(ii) any claim resulting from any act or failure to act by any person which is
(or is alleged to be) beyond the scope of his or her authority, contrary to
instructions or orders or contrary to his or her duties or applicable law; and
(iii) any attempt by any governmental authority or other person to impose any
fine or penalty or to obtain any other recovery by reason of any actual or
alleged breach of any law or other governmental requirement.
12
11.3 Express Coverage Exclusions. Except to the extent the corporation
-----------------------------
shall otherwise expressly agree in writing, the corporation shall not be
obligated under this Article Eleven to reimburse any person for or otherwise
indemnify any person against: (a) any obligation the person may have under any
written contract except to the extent such obligation arises by reason of any
action taken by such person to satisfy, settle or otherwise deal with any claim
against which such person is entitled to indemnification from the corporation
under this Article Eleven or otherwise; (b) any income taxes payable by reason
of salary, bonus or other income or gain actually realized by such person in
connection with any Covered Service; (c) any liability imposed by contract or
applicable law which is founded on, arises from or is related to activities by
such person (or such person's agents or affiliates) which are in competition
with any business of the corporation or any of its Affiliates; and (d) any
obligation to pay an amount up to the value personally realized by such person
by stealing or by any other action which constitutes a criminal felony. Except
as provided in Section 11.8 or Section 11.9, the corporation shall not be
obligated under this Article Eleven to indemnify any person in connection with a
proceeding (or part thereof) initiated by such person unless such proceeding (or
part thereof) was authorized by the Board of Directors of the corporation.
11.4 Applicable Law.
--------------
11.4.1 "Delaware Law" Defined. The term "Delaware Law" whenever it is
---------------------
used in this Article Eleven means the law of the State of Delaware
(including, but not limited to, the General Corporation Law of the State of
Delaware) as constituted after giving effect to all changes therein to
which effect is to be given for purposes of this Article Eleven under the
provisions in Section 11.4.4
11.4.2 Full Delaware Indemnification. Without limiting by implication
-----------------------------
any other provision in this Article Eleven, each person who was or is made
a party or is threatened to be made a party to or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director or
officer of the corporation, agreed to serve as a director or officer of the
corporation or is or was providing any other Covered Service, whether the
basis of such proceeding is alleged action in an official capacity as a
director or officer of the corporation or in any other Covered Service
position, shall, except as otherwise provided in Section 11.3, be
indemnified and held harmless by the corporation to the fullest extent
authorized by Delaware Law against all expense, liability and loss
(including attorneys' fees, judgments, fine, excise taxes or penalties
arising under the Employee Retirement Income Security Act as amended from
time to time and amounts paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such indemnification
shall continue as to a person who has ceased to be a director or officer of
the corporation or to provide any other Covered Service and shall inure to
the heirs, executors and administrators of such person.
13
11.4.3 Compliance With Applicable Law. This Article Eleven is
---------------------------------
expressly intended to entitle each Covered Person to obtain indemnification
and payments in accordance with and subject to the provisions of this
Article Eleven to the fullest extent permitted by applicable law and to
waive or render inapplicable to the fullest extent permitted by applicable
law any provision in applicable law which would impose any condition or
limitation upon, or otherwise impair or prohibit the enforcement of, any
provision in this Article Eleven. Every provision in this Article Eleven is
subject to the qualifications that if after giving effect to the provisions
in the preceding sentence: (i) applicable law prohibits the corporation
from making any payment or providing any indemnification otherwise required
by the express terms of this Article Eleven unless any condition is
satisfied, then the condition mandated by applicable law must be satisfied
before such payment or indemnification may be provided; (ii) applicable law
limits the amount of any payment or indemnification which the corporation
may provide, then the corporation shall comply with such limitation; or
(iii) applicable law otherwise precludes enforcement of any provision in
this Article Eleven, then such provision shall be applied to accomplish the
objective of the provision as originally written to the fullest extent
permitted by applicable law. In no event shall any condition, limitation,
or other restriction imposed upon any provision in this Article Eleven by
applicable law be deemed to limit, impair or eliminate any other provision
in this Article Eleven.
11.4.4 Effect of Changes in Applicable Law. In the event that after
-------------------------------------
December 11, 1991 there shall be any change in any law or other
governmental requirement relevant to any provision in this Article Eleven,
then: (a) to the extent that such change shall increase the amount of any
payment, indemnification or other benefit provided by Section 11.4.2 or any
other provision in this Article Eleven or shall reduce or eliminate any
condition, limitation or prohibition imposed prior to such change by
applicable law (but not also by Section 11.3) upon the enforcement of any
provision in this Article Eleven, (i) such change shall apply to this
Article Eleven, (ii) shall apply retroactively to the extent possible and
(iii) any condition to, limitation upon or prohibition upon the enforcement
of any provision in this Article Eleven imposed by applicable law prior to
such change but eliminated by such change shall cease to apply after such
change to claims for indemnification or payment under this Article Eleven
based in whole or in part on any act or failure to act which occurred prior
to or after such change and (b) to the extent that such change shall reduce
the amount of any payment, indemnification or benefit provided by Section
11.4.2 or any other provision in this Article Eleven or shall increase or
impose any condition to, limitation upon, or prohibition against the
enforcement of any right available to a Covered Person under this Article
Eleven, (i) this Article Eleven shall be construed to be subject to such
change to the least extent possible (such as for example by qualifying
under any "grandfather" provision in such change and/or by evidencing the
intent by the corporation, its Board of Directors and its stockholders that
the corporation not be subject to such change) and (ii) such change shall
to the extent possible not apply to impair rights arising in whole or in
part by reason of any act or failure to act which occurred before such
change became effective.
14
11.5 Covered Claim. The term "Covered Claim" whenever it is used in this
-------------
Article Eleven designates and includes: (i) any action, suit, or proceeding
(whether civil, criminal, administrative or investigative) in connection with
which any person shall be entitled to any payment or indemnification under or by
reason of this Article Eleven and (ii) any other attempt to impose any liability
or obligation upon any person in connection with which the corporation shall be
obligated to provide any payment or indemnification under or by reason of this
Article Eleven.
11.6 Covered Person. Each of the following shall be deemed a "Covered
---------------
Person" for purposes of this Article Eleven: (a) any person who served or shall
serve at any time as a director or officer of the corporation and (b) any other
person who provided or shall provide Covered Service at any time. In the event
any particular Covered Person shall become incapacitated or die, then (a) the
corporation shall become obligated to provide indemnification and payments to
each person to whom responsibility for any Covered Claim shall pass by reason of
such incapacity or death to the same extent the corporation would have been
obligated to provide indemnification and payments to the Covered Person if such
incapacity or death had not occurred and (b) each person to whom the Covered
Person's rights shall pass by reason of such incapacity or death (i) shall be
entitled to enforce all rights arising under or by reason of this Article Eleven
to the same extent to which the Covered Person could have enforced such rights
if such incapacity or death had not occurred and (ii) shall also be deemed to be
a "Covered Person" for purposes of this Article Eleven.
11.7 Defense Arrangements.
--------------------
11.7.1 Common Defense. If any Covered Claim shall be asserted against
--------------
both the corporation and any Covered Person then the corporation shall
assume responsibility for investigating, defending against and dealing with
such Covered Claim on behalf of both the corporation and such Covered
Person if and to the extent the corporation shall be requested to do so by
such Covered Person and to the extent the corporation can do so without
conflict of interest.
11.7.2 Separate Defense. Each Covered Person shall be entitled to
-----------------
defend against and deal with any Covered Claim which shall be asserted
against such Covered Person in such manner as such Covered Person
reasonably deems to be in such Person's best interests, including retention
of counsel to investigate and deal with such claim, payment of the full
amount claimed, settlement of such claim or defense against such claim to
ultimate resolution.
11.7.3 Reimbursement of Defense Costs. The corporation shall reimburse
------------------------------
any Covered Person for any payment made by such person for any legal fees
or other expenses reasonably incurred by such person in order to
investigate, evaluate, defend against, pay in full, settle or otherwise
deal with (i) any Covered Claim or (ii) any development or state of facts
which could give rise to a Covered Claim.
15
11.8 Payment Procedure.
-----------------
11.8.1 Payment Request. The person who is entitled under or by reason
---------------
of this Article Eleven to receive any payment (or to cause
such payment to be made directly to an ultimate recipient pursuant to
Section 11.11 of this Article Eleven) shall be entitled to deliver to the
corporation a written document which: (i) shall request payment from the
corporation in an amount specified in the document; (ii) shall contain a
succinct explanation which the person requesting such payment in good faith
believes to be adequate to demonstrate that the corporation is obliged to
make such payment under or by reason of this Article Eleven; (iii) shall
contain a commitment to repay the corporation any amount which the
corporation shall pay in response to such request but which a Final Court
Determination shall hold the corporation was not obligated to pay; (iv)
shall specify the place within the United States to which any payment or
communication made by the corporation in response to such request shall be
sent; and (v) shall be signed by or on behalf of the person (who is herein
called the "Requestor" in relationship to such document) entitled to
receive the amount requested or to require the corporation to pay the
amount requested under the provision in Section 11.11. Any document having
the characteristics described in the preceding sentence shall be deemed a
"Payment Request" for purposes of this Article Eleven, and the date upon
which such document shall be received by the corporation shall be deemed
the "Request Date" for that Payment Request and any amount requested
therein. Each of the following shall be deemed to be an "amount requested"
in any Payment Request: (a) the amount which the corporation shall be
requested to pay in such Payment Request (which shall also be deemed the
"Full Amount Requested" for purposes of this Article Eleven); (b) any
amount which the corporation shall pay in response to such Payment Request
or the circumstance giving rise to such Payment Request (whether
voluntarily, in settlement of a Contested Issue, as a result of a Final
Court Determination or otherwise); and (c) any amount which the corporation
shall be held in a Final Court Determination to be obligated to pay in
response to such Payment Request or by reason of circumstances giving rise
to such Payment Request. Without limiting by implication the generality of
the preceding provisions, any Covered Person shall be entitled to submit
any number of Payment Requests in connection with any Covered Claim, each
covering a portion of the total amount owed by the corporation in
connection with such Covered Claim. A Covered Person shall for example be
entitled to submit a separate Payment Request covering each bill for legal
services for which such Covered Person shall be entitled to reimbursement
when such bill is received.
11.8.2 Position Report. The term "Position Report" when applied with
---------------
respect to any Payment Request means a written statement signed on behalf
of the corporation by its Chief Executive Officer, Chief Financial Officer
or General Counsel (a) affirming that the corporation has made such
investigation as is necessary in order to enable the corporation to provide
the Position Report on an informed basis, (b) identifying (i) any condition
which the corporation believes must be satisfied before the corporation
will be obligated to pay all or any part of the Full Amount Requested, (ii)
any other action which the corporation believes
16
must be taken by the corporation, the Requestor or any other person before
the corporation will become obligated to pay any amount requested, (iii)
any other reason the corporation believes it is not obligated to pay all or
any part of the Full Amount Requested, and (iv) the actions the corporation
has taken or intends to take in response to the requirements in Section
11.8.4 and the status of such actions.
11.8.3 Initial Response. The "Initial Response Deadline" for any
-----------------
Payment Request shall be the tenth day immediately following the Request
Date. Payment by the corporation of the Full Amount Requested in any
Payment Request shall be due on the Initial Response Deadline unless the
corporation shall on or before the Initial Response Deadline deliver to the
place prescribed in the Payment Request a Position Report among other
things explaining why the corporation believes it is not obligated to pay
the Full Amount Requested on or before the Initial Response Deadline. Not
later than the Initial Response Deadline for any Payment Request, the
corporation shall deliver to the place specified in a Payment Request
either (a) payment of the Full Amount Requested or (b) all of the
following: (i) a Position Report prepared in accordance with Section 11.8.2
in response to such Payment Request and (ii) payment for any portion of the
Full Amount Requested for which the corporation shall not have provided in
its Position Report any good reason to believe the corporation is not
obligated to make such payment on the Initial Response Deadline. Without
limiting by implication the generality of the preceding provisions, the
corporation shall become irrevocably and unconditionally obligated to pay
on the Initial Response Deadline relating to any Payment Request any
portion of the Full Amount Requested for which the corporation shall not
supply in a Position Report or shall not supply any Position Report
delivered in accordance with the requirements in this Section 11.8.3 a good
reason to believe the corporation is not obligated to pay such portion on
the Initial Response Deadline, and the corporation shall not thereafter
have the right to contest its obligation to pay such portion.
11.8.4 Conditions Clearance. The Final Response deadline for any
---------------------
Payment Request shall be the 30th day after the Request Date for that
Payment Request. If the corporation shall conclude that any determination
by its Board of Directors shall be required to enable the corporation to
determine whether or not it will be able to pay any amount requested, then
the corporation shall obtain such determination not later than the Final
Response Deadline, and if the corporation shall not have obtained on or
before the Final Response Date a determination by its Board of Directors on
any given issue relevant to any Payment Request, the corporation shall be
deemed to have waived the right to obtain the determination from its Board
and the relative rights and obligations of the corporation and the
Requestor shall on the Final Response Deadline become what they would have
been if the Board had resolved such issue in favor of the Requestor. The
Corporation shall promptly advise the Requestor of any other information
from the Requestor which the Requestor believes necessary (i) to enable the
corporation to pay the Full Amount Requested or (ii) to cause the
corporation to become obligated to pay all or any part of the Full Amount
Requested. The corporation shall in addition at its expense use its best
efforts
17
to take or cause to be taken promptly such other actions as shall be
necessary (i) to determine whether it is required to make all or any part
of the Full Amount Requested and (ii) to cause any amount requested which
the Corporation is obligated to pay to be paid as soon as possible after
the conditions to such payment are satisfied. If the corporation shall not
have paid the Full Amount Requested on or before the Final Response
Deadline, the corporation shall provide the Requestor a Position Report on
the Final Response Deadline and shall provide the Requestor with subsequent
Position Reports thereafter as often as the Requestor shall reasonably
request (which if the Requestor shall request shall not in any event be
supplied less frequently than at 30-day intervals) until the corporation
shall have completed all actions the corporation is obligated to take on
under or by reason of this Section 11.8.4.
11.8.5 Freedom for Action. Neither the corporation, any member of its
------------------
Board of Directors nor any other person shall have any liability by reason
of any decision to pay any amount requested or any payment of any amount
requested unless (i) the decision to make such payment shall have been made
in bad faith, (ii) there shall be a Final Court Determination concluding
that the corporation was prohibited by this Article Eleven or by applicable
law from making such payment, (iii) such person's action constitutes gross
negligence or willful misconduct, and (iv) all other requirements necessary
to hold such person liable by reason of such payment (after giving effect
among other things to all other provisions in this Certificate of
Incorporation, the corporation's Bylaws and applicable law) are satisfied.
11.8.6 Resolution of Contested Issues by Designated Counsel.
----------------------------------------------------
11.8.6.1 Designation. If the corporation and any Requestor who
-----------
shall have delivered any Payment Request shall agree in writing that
any lawyer or law firm shall serve as Designated Counsel, the such
lawyer or law firm shall be Designated Counsel to the extent
prescribed in such agreement. Without limiting by implication the
generality of the preceding sentence, if the corporation and any
Covered Person shall enter into a written agreement under which they
shall agree that any law firm designated in (or in a manner prescribed
in) such agreement shall serve as Designated Counsel for purposes of
any issue relevant to whether the corporation is obligated or entitled
to make any payment requested by the Covered Person (whether pursuant
to this Article Eleven or otherwise and including, but not limited to,
issues which have not arisen or are unknown at the time such agreement
shall be made), then such law firm shall serve as Designated Counsel
for the purpose of issues involving the corporation and that Covered
Person to the extent prescribed by that agreement.
11.8.6.2 Designated Counsel's Opinion. If the corporation shall
-----------------------------
not have paid the Full Amount Requested in any Payment Request on or
prior to the Initial Response Deadline for that Payment Request, and
if a Designated Counsel shall
18
have been appointed pursuant to Section 11.8.6.1 with authority to
determine whether and to what extent the corporation shall be
obligated to pay the Full Amount Requested, then the corporation shall
use its best efforts to cause the Designated Counsel to issue on the
Final Response Deadline or as soon thereafter as reasonably possible a
letter addressed to the corporation and the Requestor in which the
Designated Counsel shall render an opinion as to what the final
outcome would be if all issues upon which the corporation and the
Requestor disagree relevant to determining whether and to what extent
the corporation is required to pay the Full Amount Requested were
determined by a Final Court Determination. In rendering such opinion,
such counsel shall have the right to render any determination under
Section 145(d) of the Corporation Law relevant to such request (and
shall do so if either the corporation or the Requestor requests it to
do so), and if such counsel shall make any such determination which
differs from the determination by the corporation's Board of Directors
or stockholders, such counsel's determination shall supersede the
determination by the Board and/or the stockholders and shall control.
Within 5 days after the Designated Counsel's opinion is issued, (i)
the corporation shall pay to the Requestor such amount as in the
opinion of the Designated Counsel the corporation would be obligated
to pay if all issues relevant to the Payment Request involved were
resolved by a Final Court Determination and (ii) the corporation shall
not thereafter have the right to contest its obligation to make such
payment. For purposes of this Article Eleven, the term "Section 145(d)
of the Delaware Corporation Law" means the provisions in Section
145(d) of the General Corporation Law of the State of Delaware as
constituted after giving effect to all changes in that section which
shall have occurred between December 11, 1991 and the time at which
such section shall be applied; provided that if Section 145(d) shall
be replaced by any other statute, then the term shall be construed to
refer to the replacement statute as constituted at the time as of
which the term shall be applied.
11.8.6.3 Designated Counsel Not Guarantor. No lawyer or law firm
--------------------------------
which shall be designated as Designated Counsel under this Article
Eleven shall have any liability to the corporation, any Covered Person
or anyone else (i) by reason of the fact that the Final Court
Determination of any issue covered by such opinion shall for any
reason be different from the outcome predicted in any opinion by such
counsel or (ii) for any other act or failure to act under or in
connection with this Article Eleven.
11.8.6.4 Designated Counsel Fees. The corporation shall pay all
------------------------
charges made by any Designated Counsel for services performed in
connection with this Article Eleven. If the corporation shall fail to
promptly make any payment required by the preceding sentence, then any
Covered Person interested in any issue decided by such counsel may
elect to make such payment, and if any Covered Person does so, (i)
such Covered Person shall be entitled to immediate reimbursement from
19
the corporation for such payment and (ii) such payment shall be deemed
a Collection Cost.
11.8.7 Court Contest.
-------------
11.8.7.1 Basic Contest Right. If for any reason the corporation
-------------------
shall not pay the Full Amount Requested in any Payment Request on or
before the Final Response Deadline, then the Requestor shall be
entitled to obtain a determination from the court designated in
Section 11.8.7.2 on any issue (herein called a "Contested Issue")
relevant to whether the corporation is obligated to pay any amount
requested in any Payment Request on or prior to the Final Response
Deadline. The Requestor's right to obtain a final Court Determination
shall not be impaired to any extent by any determination by the
corporation's Board of Directors, stockholders or Designated Counsel,
but rather the court shall not be bound or affected by any
determination by the Board, stockholders or Designated Counsel which
shall be adverse to the Requestor and shall be entitled to decide each
Contested Issue as if no such adverse determination had been made. The
corporation shall not however be entitled to contest any determination
by its Board, stockholders or Designated Counsel in favor of the
Requestor.
11.8.7.2 Court.
-----
(a) Delaware State Courts. If the Requestor shall request
----------------------
that any Contested Issue be determined by the Delaware state
courts and shall submit to the jurisdiction of such courts, then
the corporation shall be subject to the jurisdiction of such
courts for purposes of resolving the Contested Issue, and such
issue shall be decided by the Delaware Court of Chancery (or such
other Delaware state court which shall have jurisdiction over the
subject matter involved), provided that if either party shall
make an appropriate appeal from a decision by the state court in
Delaware by which such issue shall first be decided, the
Contested Issue shall be resolved by the highest court which
shall have decided such issue after all appeal rights shall have
been exercised or shall have expired.
(b) Delaware Federal Court. If the Requestor shall request
-----------------------
that any Contested Issue be determined by the United States
District Court in the State of Delaware and shall submit to the
jurisdiction of such court, then the corporation shall be subject
to the jurisdiction of such court for purposes of resolving the
Contested Issue, and such issue shall be decided by the United
States District Court in the State of Delaware, provided that if
either party shall make an appropriate appeal from a decision by
the United States District Court in the State of Delaware by
which such issue shall first be
20
decided, then the Contested Issue shall be resolved by the
highest court which shall have decided such issue after all
appeal rights have been exercised or shall have expired.
(c) Other Court. If the Requestor shall not request that any
-----------
Contested Issue be resolved in the courts specified in paragraph
(a) or (b) in this Section 11.8.7.2, then the Contested Issue may
be resolved by any court having jurisdiction over the Requestor,
the corporation and the Contested Issue (including, but not
limited to, any court specified in paragraph (a) or (b) of this
Section 11.8.7.2 which has such jurisdiction).
11.8.7.3 Burden of Proof.The burden of proof on each Contested
---------------
Issue shall rest with the corporation. Each court shall decide each
Contested Issue in favor of the Requestor unless the corporation is
able to establish in a clear and convincing manner that on the basis
of the facts and the law involved such issue must be resolved in favor
of the corporation.
11.8.7.4 Final Court Determination. For purposes of this Article
-------------------------
Eleven, the term "Final Court Determination" as applied to any issue
between the corporation and any other person means the decision
rendered by the highest court having jurisdiction over such issue, the
corporation and such other person which shall have decided such issue
after all appeal rights shall have been exhausted or shall have
expired.
11.8.8 Alternative Methods to Obtain Payment. The purpose of this
---------------------------------------
Section 11.8 is to prescribe one clear procedure which any Covered Person
shall be entitled to use to seek to obtain any amount which may be due to
such person from the corporation under or by reason of this Article Eleven.
It is not intended however that this Section 11.8 preclude any Covered
Person from pursuing any other procedure, or method or right which may be
available to such Covered Person to obtain any payment which may be owed to
such person by the corporation.
11.9 Collection Costs. If the corporation shall fail to pay any amount
-----------------
requested in a Payment Request submitted by a Covered Person within ten days
after the Request Date, then the Covered Person who shall have sought payment of
the amount requested shall be entitled to receive from the corporation at the
earlier of the time at which a Final Court Determination shall be rendered
finding that the corporation is obligated to pay the amount requested or the
time at which the amount requested shall be made all attorneys' fees and other
expenses reasonably incurred by any Covered Person to seek to obtain the amount
requested.
11.11 Interest.
--------
21
11.11.1 Basic Requirement. The corporation shall pay interest on each
-----------------
amount owed by the corporation under this Article Eleven at the time, to
the person, and at the rate prescribed by this Section 11.11.
11.11.2 Accrual Period.
--------------
11.11.2.1 Indemnification Payments. Interest shall start to
-------------------------
accrue on any amount the corporation shall pay or shall be required to
pay under this Article Eleven other than a Collection Cost or interest
on the eleventh day after the Request Date for such amount. Without
limiting by implication the generality of the preceding sentence, if
the amount the corporation shall ultimately pay or be required to pay
as a result of any Payment Request shall be less than the Full Amount
Requested in such Payment Request (whether by reason of settlement,
Final Court Determination or otherwise), then interest shall accrue on
the amount the corporation shall ultimately pay or be required to pay
beginning on the eleventh day after the receipt by the corporation of
the Payment Request.
11.11.2.2 Collection Costs. Interest shall begin to accrue on any
----------------
Collection Cost at the time such Collection Cost shall have been paid
by the person by whom it was incurred.
11.11.2.3 Compounding. Interest accrued under this Article Eleven
-----------
shall compound at the beginning of each calendar quarter, i.e., on
each January 1, April 1, July 1, and October 1. Interest shall begin
to accrue at the rate prescribed by Section 11.11.5 on all interest
which shall have accrued prior to such date under this Article Eleven
but which shall not have been paid prior to such date.
11.11.2.4 End of Accrual Period. Interest shall cease to accrue
----------------------
on any amount owed under this Article Eleven when such amount shall be
paid. Unless the recipient of any payment made under this Article
Eleven shall otherwise agree in writing, such payment shall be applied
first to satisfy interest owed to such recipient and the balance,
after all accrued interest owed to such recipient shall have been
paid, shall be applied to principal.
11.11.3 Due Date. Interest accrued under this Section 11.11 shall be
--------
due and payable at the same time at which the amount on which it has
accrued shall be due and payable.
11.11.4 Recipient. The person entitled to receive payment from the
---------
corporation for any amount owed under this Article Eleven shall also be
entitled to receive interest which shall accrue on such amount.
11.11.5 Accrual Rate. Interest shall accrue during any given calendar
------------
quarter at a rate exactly four percent per annum higher than the yield to
maturity on treasury bills with a
22
13-week maturity sold by the United States government on the first day of
such quarter (or if no treasury bills shall be sold on the first day of
such quarter, on such treasury bills sold on the latest date on which
treasury bills with a 13-week maturity shall have been sold by the United
States Government prior to the first day in such quarter). In the event for
any reason the United States Government shall not sell treasury bills with
a 13-week maturity within one month prior to the beginning of any calendar
quarter, then interest shall accrue under this Section 11.11. for that
quarter at a rate equivalent to the rate intended by this Section 11.11.5.
11.11.6 Secondary Interest. In the event any Covered Person shall
-------------------
obtain a loan to provide funds to pay any amount for which such Covered
Person shall be reimbursed by the corporation or be held in a Final Court
Determination to be entitled to be reimbursed by the corporation or shall
otherwise obtain credit in connection with such amount (such as
arrangements under which charges for legal services for which the
corporation shall pay or be obligated to pay under or by reason of this
Article Eleven are deferred by the lawyers providing those services in
exchange for an interest charge running from the time the services
generating the charges were rendered to the time at which payment for those
charges is received), then the corporation shall be obligated to pay all
interest which shall accrue on such loan or credit.
11.11 Direct Payments. In any case in which a Covered Person would be
----------------
entitled to receive reimbursement under this Article Eleven for any amount if
such amount were paid by such Covered Person to the person (herein called the
"ultimate recipient") to whom it shall be owed by the Covered Person, then the
Covered Person may elect to direct the corporation to make the payment directly
to the ultimate recipient, and if the Covered Person so directs, the corporation
shall make such payment directly to the ultimate recipient in accordance with
such direction.
11.12 Coverage Scope. Every person who shall at any time serve as a
---------------
director or officer of the corporation or who shall otherwise constitute a
Covered Person under the definition provided in Section 11.6 shall be entitled
to rely (and shall be conclusively presumed to have relied) upon the protection
afforded by this Article Eleven. This Article Eleven is expressly intended among
other things to induce persons to serve the corporation or to continue to serve
the corporation. This Article Eleven is expressly intended to constitute a
contract between the corporation and every person who shall at any time serve as
a director or officer of the corporation or who shall otherwise constitute a
Covered Person under the definition provided in Section 11.6. This Article
Eleven is expressly intended to provide protection on both a "claims incurred"
basis and a "claims made" basis, and therefore (without limiting by implication
the scope of the preceding provisions in this Article Eleven): (i) no repeal or
modification of any provision in this Article Eleven or any right arising under
this Article Eleven shall be effective to take away or in any way impair any
right which any person would have had under this Article Eleven in the absence
of such repeal or modification with respect to any liability or expense which
such person would not have incurred but for any act or failure to act which
shall have occurred prior to such repeal or modification or which shall
otherwise arise out of such act or failure to act; (ii) the termination of a
person's service as a director or officer of the corporation or the termination
of any other Covered Service by any person
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shall not take away or in any way impair such person's right to receive payments
under this Article Eleven; (iii) a person shall be entitled to receive
compensation to which such person is entitled under the provisions of this
Article Eleven even if the act or failure to act giving rise to the claim for
such compensation shall have occurred prior to the time this Article Eleven
became part of the corporation's Certificate of Incorporation; and (iv) if the
corporation shall merge into any corporation or other entity, the successor
corporation or other successor entity shall after such merger have all
obligations which the corporation would have had under or by reason of this
Article Eleven if it had remained in effect and been assumed by the successor.
11.13 Separate Indemnification Contract. Any officer of the corporation or
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any member of its Board of Directors shall have the right and power to execute
on behalf of the corporation any written contract with any other person
providing indemnification or other protection to such other person in connection
with service by such other person as a director or officer of the corporation or
in connection with any other Covered Service by such person, and any such
contract shall be legal, valid and binding upon the corporation and shall be
enforceable against the corporation in accordance with its terms to the maximum
extent permitted by this Article Eleven or by applicable law, if it shall be
approved by a majority of the members of the corporation's Board of Directors
exclusive of the person to whom indemnification is provided by such contract.
The rights of any person under any particular contract made in accordance with
the provisions of the preceding sentence shall not be impaired or eliminated (i)
by reason of the fact that all or any one or more of the members of the Board
who approved such contracts shall be parties to contracts affording them similar
protection (regardless of when those other contracts shall have been approved or
signed) or shall otherwise have been provided with protection similar to that
provided in the particular contract or shall be subject to the same claims
against which the particular contract is intended to protect or (ii) for any
other reason whatsoever. It is expressly intended that each person with whom the
corporation shall enter into a written contract to provide indemnification or
other protection in connection with such person's service as an officer or
director of the corporation or in connection with other Covered Service by such
person shall be entitled to rely upon (and shall conclusively be presumed to
have relied upon) the rights which such contract purports to provide to such
person. No separate written contract shall however be necessary in order for any
person to obtain any indemnification or payment to which this Article Eleven
purports to entitle such person, and any Covered Person who has no separate
contact of any kind with the corporation shall be entitled to receive all
indemnification, payments and other benefits which the provisions in this
Article Eleven other than this Section 11.13 purport to provide to such Covered
Person.
11.14 Indemnification Hereunder Not Exclusive. The rights to
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indemnification and payment provided by this Article Eleven shall not be deemed
exclusive of any other right of any kind which any person may have or at any
time acquire under or by reason of any other provision in this Certificate of
Incorporation, the corporation's Bylaws, any agreement, any law or other action
by any governmental authority, or otherwise.
11.15 Insurance. The corporation may purchase and maintain insurance on
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behalf of any person who is or was a director or officer of the corporation, or
is or was serving in any other capacity with the corporation, any Employee Plan
or any other organization against any expense, liability or loss whether or not
the corporation would have the power to indemnify such person against such
expense, liability or loss under the provisions of this Article Eleven, under
applicable law or otherwise.
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ARTICLE TWELVE
AMENDMENTS
12.1 Reservation of Right to Amend. The corporation reserves the right to
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amend, alter, change or repeal any provision contained in this Certificate of
Incorporation in the manner now or hereafter prescribed herein and by the
General Corporation Law of the State of Delaware, and all rights conferred upon
stockholders, directors and officers herein are granted subject to this
reservation.
12.2 Requirement of Board of Director Approval. No change in this
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Certificate of Incorporation shall be made unless it shall have been approved by
at least 80% of this corporation's sitting directors and shall have received
such other approvals as may be required by this corporation's Bylaws or by
applicable law.
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