EXHIBIT 10.1
DIRECTOR’S
INDEMNIFICATION AGREEMENT
This
Director’s Indemnification Agreement
(“Agreement”) is made as of April 3, 2008 (the
“Effective Date”) by and between the Federal
Agricultural Mortgage Corporation, a corporation established
as a federally chartered instrumentality of the United States
(the “ Company
”), and ______________ who serves as a Director of the
Company (“ Indemnitee
”).
RECITALS
WHEREAS,
highly competent persons have become more reluctant to serve
corporations as Directors unless they are provided with
adequate protection through insurance and/or indemnification
against the risks of claims being asserted against them
arising out of their service to and activities on behalf of
such corporations; and
WHEREAS,
the Board of Directors of the Company (the “ Board
”) has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the
best interests of the Company’s investors and that the
Company should act to assure such persons that there will be
increased certainty of such protection in the future;
and
WHEREAS,
the Board has determined that, in order to help attract and
retain qualified individuals as Directors, the best interests
of the Company and its investors will be served by attempting
to maintain, on an ongoing basis, at the Company’s sole
expense, insurance to protect persons serving the Company and
its subsidiaries as directors and in other capacities from
certain liabilities. Although the furnishing of
such insurance has been a customary and widespread practice
among United States-based corporations and other business
enterprises for many years, the Company believes that, given
current market conditions and trends, such insurance may be
available to it in the future only at higher premiums and with
more exclusions. At the same time, directors, in
service to corporations or business enterprises are being
increasingly subjected to expensive and time-consuming
litigation; and
WHEREAS,
the Board has determined that, in order to help attract and
retain qualified individuals as directors and in other
capacities, the best interests of the Company and its
investors will be served by assuring such individuals that the
Company will indemnify them to the maximum extent permitted by
law; and
WHEREAS,
the Amended By-Laws of the Company (the “ By-Laws
”) require indemnification of the officers and directors
of the Company, and Indemnitee may also be entitled to
indemnification pursuant to applicable law in the District of
Columbia (“ DC Law
”); and
WHEREAS,
the By-Laws expressly provide that the indemnification
provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into
between the Company and members of the Board with respect to
indemnification and the advancement of defense costs;
and
WHEREAS,
it therefore is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify, and to
advance defense costs on behalf of, such persons to the
fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern
that they will not be so indemnified; and
WHEREAS,
this Agreement is a supplement to and in furtherance of the
By-Laws and any resolutions adopted pursuant thereto, and
shall not be deemed a substitute therefor, nor shall it be
deemed to diminish or abrogate any rights of Indemnitee
thereunder; and
WHEREAS,
the Board recognizes that the Indemnitee does not regard the
protection available under the By-Laws and insurance program
as adequate in the present circumstances, and may not be
willing to serve or continue to serve as a director and/or in
such other capacity as the Company may request without
adequate protection, and the Company desires Indemnitee to
serve in such capacity; and
WHEREAS,
Indemnitee is willing to serve, and continue to serve, as a
member of the Board of Directors (and any committee thereof)
of the Company, on the condition that he or she be indemnified
as provided for herein.
NOW,
THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:
1.
Services to
the Company. Indemnitee will serve or
continue to serve as a Director of the Company for so long as
Indemnitee is duly elected or appointed or until Indemnitee
tenders his or her resignation. This Agreement
shall not serve as a binding commitment on the part of
Indemnitee to continue to serve in such capacity, or on the
part of the Company to cause him to be nominated to successive
terms as a Director or to not otherwise be removed for cause
as permitted under law.
2.
Definitions.
As used in this Agreement:
(a) A
“ Change in
Control ” shall be deemed to occur upon the
earliest to occur after the date of this Agreement of any of
the following events:
(i) Any
Person (excluding any employee benefit plan of the Company or
any subsidiary of the Company) is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined
voting power of the Company’s outstanding securities
then entitled ordinarily to vote for the election of
Directors; or
(ii) During
any period of two (2) consecutive years commencing on or after
the Effective Date, the individuals who at the beginning of
such period constitute the Board or any individuals who would
be Continuing Directors (as defined below) cease for any
reason to constitute at least a majority thereof;
or
(iii) The
Board shall approve a sale of all or substantially all of the
assets of the Company; or
(iv) The
Board shall approve any merger, consolidation, or like
business combination or reorganization of the Company, the
consummation of which would result in the occurrence of any
event described in clause (i) or (ii), above.
(b) “
Continuing
Directors ” shall mean the directors of the
Company in office on the Effective Date and any successor to
any such director and any additional director who after the
Effective Date (i) was nominated or selected by a
majority of the Continuing Directors in office at the time of
his or her nomination or selection and (ii) who is not an
“affiliate” or “associate” (as defined
in Regulation 12B promulgated under the Exchange Act) of any
person who is the beneficial owner, directly or indirectly, of
securities representing ten percent (10%) or more of the
combined voting power of the Company’s outstanding
securities then entitled ordinarily to vote for the election
of directors.
(c) “
Exchange
Act ” shall mean the Securities Exchange Act of
1934, as amended.
(d) “
Person
” shall have the meaning set forth in Sections 13(d) and
14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company and (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of
the Company or a subsidiary of the Company.
(e) “
Beneficial
Owner ” shall have the meaning given to such term
in Rule 13d-3 issued under the Exchange Act; provided,
however, that Beneficial Owner shall exclude any Person
becoming a Beneficial Owner by reason of the stockholders of
the Company approving a merger of the Company with another
entity.
(f) “
Corporate
Status ” shall describe the status of a person
who is or was a director, officer, trustee, partner, member,
fiduciary, employee or agent of the Company or of any other
Enterprise (as defined below), which such person is or was
serving at the request of the Company.
(g) “
Disinterested
Director ” shall mean a director of the Company
who is not and was not a party to the Proceeding (as defined
below) in respect of which indemnification is sought by
Indemnitee.
(h) “
Enterprise
” shall mean any corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or
other enterprise of which Indemnitee is or was serving at the
request of the Company as a director, officer, trustee,
administrator, partner, member, fiduciary, employee or
agent.
(i) “
Expenses
” shall include all reasonable attorneys’ fees,
retainers, court costs, transcript costs, fees of experts and
accountants, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses
of the types and amounts customarily incurred in connection
with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding (as defined
below). Expenses also shall include costs incurred
in connection with any appeal resulting from any Proceeding
(as defined below), including, without limitation, the
premium, security for, and other costs relating to any bond,
supersedeas bond, or other appeal bond or its
equivalent. Expenses, however, shall not include
amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.
(j) References
to “ fines
” shall include any excise tax assessed on a person with
respect to any employee benefit plan pursuant to applicable
law.
(k) References
to “ serving at the
request of the Company ” shall include any
service provided at the request of the Company as a director,
officer, trustee, administrator, partner, member, fiduciary,
employee or agent of the Company which imposes duties on, or
involves services by, such director, officer, trustee,
administrator, partner, member, fiduciary, employee or agent
with respect to an employee benefit plan, its participants or
beneficiaries.
(l) Any
action taken or omitted to be taken by a person for a purpose
which he or she reasonably believed to be in the interests of
the participants and beneficiaries of an employee benefit plan
shall be deemed to have been taken in “ good
faith
” and for a purpose which is “ not opposed to
the best interests of the Company” , as such
terms are referred to in this Agreement and may be used in DC
Law.
(m) The
term “ Proceeding
” shall include any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or
any other actual, threatened or completed proceeding, whether
brought in the right of the Company or otherwise and whether
of a civil, criminal, administrative or investigative nature,
including any related appeal, in which Indemnitee was, is or
will be involved as a party or witness or otherwise by reason
of the fact that Indemnitee is or was a director, officer,
trustee, administrator, partner, member, fiduciary, employee
or agent of the Company, by reason of any action taken or not
taken by him or her while acting as director, officer,
trustee, administrator, partner, member, fiduciary, employee
or agent of the Company, or by reason of the fact that he or
she is or was serving at the request of the Company as a
director, officer, trustee, administrator, partner,
member, fiduciary, employee or agent of any other Enterprise,
in each case whether or not serving in such capacity at the
time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses can
be provided under this Agreement.
(n) “
Independent
Counsel ” means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and
neither presently is, nor in the past five (5) years has been,
retained to represent: (i) the Company or Indemnitee in any
matter material to either such party (other than with respect
to matters concerning the Indemnitee under this Agreement, or
other indemnitees under similar indemnification agreements),
or (ii) any other party to the Proceeding giving rise to a
claim for indemnification
hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person
who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this
Agreement.
3.
Indemnity in
Third-Party Proceedings. The Company shall
indemnify and hold harmless Indemnitee in accordance with the
provisions of this Section 3 if Indemnitee is made, or is
threatened to be made, a party to or a participant in (as a
witness or otherwise) any Proceeding, other than a Proceeding
by or in the right of the Company to procure a judgment in its
favor. Pursuant to this Section 3, Indemnitee shall
be indemnified and held harmless against all judgments, fines,
penalties, amounts paid in settlement (if such settlement is
approved in writing in advance by the Company, which approval
shall not be unreasonably withheld) (including, without
limitation, all interest, assessments and other charges paid
or payable in connection with or in respect of any of the
foregoing) (collectively, “ Losses
”) and Expenses actually and reasonably incurred by
Indemnitee or on his or her behalf in connection with such
Proceeding or any action, discovery event, claim, issue or
matter therein or related thereto, if Indemnitee acted in good
faith, for a purpose which he or she reasonably believed to be
in or not opposed to the best interests of the Company and, in
the case of a criminal Proceeding, in addition, had no
reasonable cause to believe that his or her conduct was
unlawful.
4.
Indemnity in
Proceedings by or in the Right of the
Company. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 4
if Indemnitee is made, or is threatened to be made, a party to
or a participant in (as a witness or otherwise) any Proceeding
by or in the right of the Company to procure a judgment in its
favor. Pursuant to this Section 4, Indemnitee shall
be indemnified and held harmless against all Expenses actually
and reasonably incurred by him or her or on his or her behalf
in connection with the defense or settlement of such
Proceeding or any action, discovery event, claim, issue or
matter therein or related thereto, if Indemnitee acted in good
faith, for a purpose which he or she reasonably believed to be
in or not opposed to the best interests of the
Company. No indemnification, however, shall be made
under this Section 4 in respect of any claim, issue or
matter as to which Indemnitee shall have been adjudged to be
liable to the Company, unless and only to the extent
that the
court in which the Proceeding was brought or, if no Proceeding
was brought in a court, any court of competent jurisdiction,
determines upon application that, in view of all the
circumstances of the case, Indemnitee fairly and reasonably is
entitled to indemnification for such portion of the Expenses
as the court deems proper.
5.
Indemnification for
Expenses Where Indemnitee is Wholly or Partly
Successful. Notwithstanding and in addition
to any other provisions of this Agreement, to the extent that
Indemnitee is a party to a Proceeding and is successful, on
the merits or otherwise, in the defense of any claim, issue or
matter therein, the Company shall indemnify and hold harmless
Indemnitee against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection
with such successful defense if Indemnitee acted in good
faith, for a purpose which he or she reasonably believed to be
in or not opposed to the best interests of the
Company. For the avoidance of doubt, if Indemnitee
is not wholly successful in such Proceeding but is successful,
on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in
connection with each successfully resolved claim, issue or
matter. For purposes of this Section 5 and, without
limitation, the termination of any claim, issue or matter in
such a Proceeding by withdrawal or dismissal, with or without
prejudice, shall be deemed to be a successful result as to
such claim, issue or matter.
6.
Indemnification for
Expenses of a Witness. Notwithstanding and
in addition to any other provision of this Agreement, to the
extent that Indemnitee is, by reason of his or her Corporate
Status, a witness in or otherwise incurs Expenses in
connection with any Proceeding to which Indemnitee is not a
party, he or she shall be indemnified and held harmless by the
Company against all Expenses actually and reasonably incurred
by him or her or on his or her behalf in connection
therewith.
7.
Additional
Indemnification.
(a) Notwithstanding
any limitation in Sections 3, 4, or 5 hereof or other
applicable statutory provision, the
Company shall indemnify Indemnitee to the fullest extent
permitted by law if Indemnitee is made, or is threatened to be
made, a party to any Proceeding (including a Proceeding by or
in the right of the Company to procure a judgment in its
favor) against all Losses and Expenses actually and reasonably
incurred by Indemnitee in connection with the
Proceeding. No indemnification shall be made under
this Section 7(a) on account of Indemnitee’s conduct
which constitutes a breach of Indemnitee’s duty of
loyalty to the Company or its investors or is an act or
omission not in good faith or which involves intentional
misconduct or a knowing violation of the law.
(b) For
purposes of Sections 7(a), the meaning of the phrase “
to
the fullest extent permitted by law ” shall
include, but not be limited to:
i. to
the fullest extent authorized or permitted by the
then-applicable provisions of DC Law or other applicable
statutory provision, that authorize or contemplate
indemnification by agreement, or the corresponding provision
of any amendment to or replacement of DC Law or other
applicable statutory provision, and
ii. to
the fullest extent authorized or permitted by any amendments
to or replacements of DC Law or other applicable statutory
provision, adopted after the date of this Agreement that
increase the extent to which a corporation limited liability
company or partnership, as applicable may indemnify its
officers, directors or persons holding similar fiduciary
responsibilities.
(c) Indemnitee
shall be entitled to the prompt payment of all Expenses
reasonably incurred in enforcing successfully (fully or
partially) this Agreement.
8.
Exclusions.
Notwithstanding any provision in this Agreement, the Company
shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against
Indemnitee:
(a) for
which payment actually has been received by or on behalf of
Indemnitee under any insurance policy or other indemnity
provision, except with respect to any excess beyond the amount
actually received under such insurance policy or other
indemnity provision; or
(b) for
an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company
or any subsidiary of the Company within the meaning of Section
16(b) of the Exchange Act, as amended, or similar provisions
of state blue sky law, state statutory law or common law;
or
(c) prior
to a Change in Control, in connection with any Proceeding (or
any part of any Proceeding) initiated by Indemnitee, including
any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company (other than any Proceeding
referred to in Sections 13(d) or (e) below or any other
Proceeding commenced to recover any Expenses referred to in
Section 7(c) above) or its directors, officers, employees or
other indemnitees, unless (i) the Board authorized the
Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification,
in its sole discretion, pursuant to the powers vested in the
Company under applicable law; or
(d) if
the funds at issue were paid pursuant to a settlement approved
by a court and indemnification would be inconsistent with any
condition with respect to indemnification expressly imposed by
the court in approving the settlement; or
(e) that
would constitute an “indemnification payment” as
defined in 12 U.S.C. Sec.2277a-10b(2) and is prohibited by 12
U.S.C. Sec.2277a-10b(e).
9.
Advances of
Expenses; Defense of Claim.
(a) Notwithstanding
any provision of this Agreement to the contrary, the
Indemnitee shall be entitled to advances of Expenses incurred
by him or her or on his or her behalf in connection with a
Proceeding that I
|
