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Exhibit 10.1
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "Agreement") dated as of
(INSERT DATE) is made by and between DaVita Inc., a Delaware
corporation, (the "Company"), and (INSERT NAME) (the
"Indemnitee").
R E C I T
A L S :
A. The Company recognizes that competent and experienced persons
are increasingly reluctant to serve as directors and officers of
corporations unless they are protected by comprehensive liability
insurance or indemnification, or both, due to increased exposure to
litigation costs and risks resulting from their service to such
corporations, and due to the fact that the exposure frequently
bears no reasonable relationship to the compensation of such
directors.
B. The Company and the Indemnitee recognize that plaintiffs
often seek damages in such large amounts and the costs of
litigation may be so substantial (whether or not the case is
meritorious), that the defense and/or settlement of such litigation
is often beyond the personal resources of directors and
officers.
C. The Company believes that it is unfair for its directors and
officers to assume the risk of substantial judgments and other
expenses which may occur in cases in which the director and/or
officer, as the case may be, received no personal profit and in
cases where such person acted in good faith.
D. Section 145 of the General Corporation Law of the State
of Delaware ("Section 145"), under which the Company is
organized, and the Bylaws of the Company (the "Bylaws") empower the
Company to indemnify its directors and officers by agreement and to
indemnify persons who serve, at the request of the Company, as the
directors and officers of other corporations or enterprises, and
expressly provides that the indemnification provided by
Section 145 and the Bylaws are not exclusive.
E. The Board of Directors of the Company (the "Board") has
determined that contractual indemnification as set forth herein is
not only reasonable and prudent but necessary to promote the best
interests of the Company and its stockholders.
F. The Company desires and has requested the Indemnitee to serve
or continue to serve as a director and/or officer of the
Company.
G. This Agreement is a supplement to and in furtherance of the
Bylaws and any resolutions adopted pursuant thereto, and shall not
be deemed a substitute therefore, nor to diminish or abrogate any
rights of the Indemnitee thereunder.
H. The Indemnitee is only willing to serve, or to continue to
serve, as a director and/or officer of the Company if the
Indemnitee is furnished the indemnity provided for herein by the
Company.
A G R
E E M E N T :
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth below, the parties hereto, intending to be
legally bound, hereby agree as follows:
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1. Definitions .
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(a) Agent . For purposes of this Agreement, "agent" of
the Company means any person who: (i) is or was a director
and/or officer of the Company or a subsidiary of the Company; or
(ii) is or was serving at the request of, for the convenience
of, or to represent the interest of the Company or a subsidiary of
the Company as a director and/or officer of another foreign or
domestic corporation, partnership or joint venture.
(b) Change in Control . For purposes of this Agreement, 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:
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i. Acquisition of Stock by Third Party. Any Person (as defined
below) is or becomes the Beneficial Owner (as defined below),
directly or indirectly, of securities of the Company representing
fifteen percent (15%) or more of the combined voting power of
the Company’s then outstanding securities, other than such
acquisition of securities as shall have been previously approved by
the Board;
ii. Change in Board of Directors. During any twelve
(12) month period (not including any period prior to the
execution of this Agreement), individuals who at the beginning of
such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in Sections
1(b)(i), 1(b)(iii) or 1(b)(iv)) whose election by the Board or
nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously
so approved, cease for any reason to constitute at least a majority
of the members of the Board;
iii. Corporate Transactions. The effective date of a merger or
consolidation of the Company with any other entity, other than a
merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the
voting securities of the surviving entity outstanding immediately
after such merger or consolidation and with the power to elect at
least a majority of the Board or other governing body of such
surviving entity;
iv. Liquidation. The approval by the stockholders of the Company
of a complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of
the Company’s assets; and
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v. Other Events. There occurs any other event of
a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or a response to
any similar item on any similar schedule or form) promulgated under
the Exchange Act (as defined below), whether or not the Company is
then subject to such reporting requirement.
For purposes of this Section 1(b), the following terms
shall have the following meanings:
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(A) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(B) "Person" shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company, (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, and (iii) any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
(C) "Beneficial Owner" shall have the meaning given to such term
in Rule 13d-3 under the Exchange Act; provided, however, that
Beneficial Owner shall exclude any Person otherwise becoming a
Beneficial Owner by reason of the stockholders of the Company
approving a merger of the Company with another entity.
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(c) Expenses . For purposes of this Agreement, "expenses"
includes all direct and indirect costs of any type or nature
whatsoever (including, without limitation, all attorneys’
fees and related disbursements, other out-of-pocket costs and
reasonable compensation for time spent by the Indemnitee for which
he is not otherwise compensated by the Company or any third party,
provided that the rate of compensation and estimated time involved
is approved in advance by the Board), actually and reasonably
incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or
enforcing a right to indemnification under this Agreement,
Section 145 or otherwise, and amounts paid in settlement by or
on behalf of the Indemnitee, but shall not include any judgments,
fines or penalties actually levied against the Indemnitee.
(d) Disinterested Director . For purposes of this
Agreement, "Disinterested Director" means a director of the Company
who is not and was not a party to the proceeding in respect of
which indemnification is sought by the Indemnitee.
(e) Independent Counsel . For purposes of this Agreement,
"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 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 of 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
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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. The Company agrees to pay the reasonable fees
and expenses of the Independent Counsel referred to above and to
fully indemnify such counsel against any and all expenses, claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
(f) Proceedings . For the purposes of this Agreement,
"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 legislative, or investigative nature, including any
appeal therefrom, in which Indemnitee was, is or will be involved
as a party, potential party, non-party witness or otherwise by
reason of the fact that Indemnitee is or was a director or officer
of the Company, by reason of any action taken by him or of any
action on his part while acting as director or officer of the
Company, or by reason of the fact that he is or was serving at the
request of the Company as a director or officer of another
corporation, limited liability company, partnership, joint venture,
trust or 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; except one initiated by an
Indemnitee to enforce his rights under this Agreement.
(g) Subsidiary . For purposes of this Agreement,
"subsidiary" means any corporation (or other entity) of which more
than 50% of the outstanding voting securities are owned directly or
indirectly by the Company, by the Company and one or more other
subsidiaries, or by one or more other subsidiaries.
2. Agreement to Serve . The Indemnitee agrees to serve
and/or continue to serve as an agent of the Company, at the will of
such corporation (or under separate agreement, if such agreement
exists), in the capacity the Indemnitee currently serves as an
agent of such corporation, so long as the Indemnitee is duly
appointed or elected and qualified in accordance with the
applicable provisions of the bylaws of such corporation or of any
subsidiary thereof, or until such time as the Indemnitee tenders
his resignation in writing; provided, however, that nothing
contained in this Agreement is intended to create any right to
continued employment of the Indemnitee in any capacity.
3. Indemnification .
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(a) Indemnification in Third Party Proceedings . Subject
to Section 15 below, the Company shall indemnify the
Indemnitee if the Indemnitee is a party to or threatened to be made
a party to or otherwise involved in any proceeding (other than a
proceeding by or in the name of the Company to procure a judgment
in its favor) by reason of the fact that the Indemnitee is or was
an agent of the Company, or by reason of any act or inaction by him
in any such capacity (including, but not limited to, any written
statement of the Indemnitee that (i) is required to be, and
is, filed with the Securities and Exchange Commission (the "SEC")
regarding the adequacy of the Company’s internal controls or
the accuracy of reports or statements filed by the Company with
the
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SEC pursuant to federal laws and/or
administrative regulations (each, a "Required Statement") or
(ii) is made to another officer or employee of the Company to
support a Required Statement), against any and all expenses and
liabilities of any type whatsoever (including, but not limited to,
judgments, fines and penalties)), actually and reasonably incurred
by him in connection with the investigation, defense, settlement or
appeal of such proceeding, but only if the Indemnitee acted in good
faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to
believe Indemnitee’s conduct was unlawful, pursuant to the
presumption set forth in subsection (c) below, as
applicable.
(b) Indemnification in Derivative Actions . Subject to
Section 15 below, the Company shall indemnify the Indemnitee
if the Indemnitee is a party to or threatened to be made a party to
or otherwise involved in any proceeding by or in the name of the
Company to procure a judgment in its favor by reason of the fact
that the Indemnitee is or was an agent of the Company, or by reason
of any act or inaction by him in any such capacity (including, but
not limited to, any written statement of the Indemnitee that
(i) is a Required Statement or (ii) is made to another
officer or employee of the Company to support a Required
Statement), against all expenses actually and reasonably incurred
by the Indemnitee in connection with the investigation, defense,
settlement, or appeal of such proceedings, but only if the
Indemnitee acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Company, pursuant to the presumption set forth in subsection
(c) below; provided, however, that no indemnification under
this subsection (b) shall be made in respect of any claim,
issue or matter as to which the Indemnitee shall have been finally
adjudged to be liable to the Company by a court of competent
jurisdiction due to willful misconduct of a culpable nature in the
performance of the Indemnitee’s duty to the Company, unless
and only to the extent that any court in which such proceeding was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem proper.
(c) Conclusive Presumption Regarding Indemnitee Conduct .
With respect to Sections 3(a) and 3(b) above, the Indemnitee
shall be conclusively presumed to have acted in good faith and in a
manner Indemnitee reasonably believed to be in, or not opposed to,
the best interests of the Company, and, with respect to any
criminal action or proceeding, to have had no reasonable cause to
believe Indemnitee’s conduct was unlawful, unless a
determination is made pursuant to the procedures set forth in
Section 11 below that the Indemnitee has not acted in
accordance with the standards set forth above.
4. Indemnification of Expenses of Successful Party .
Notwithstanding any other provisions of this Agreement, to the
extent that the Indemnitee has been successful on the merits or
otherwise in defense of any proceeding or in defense of any claim,
issue or matter therein, including the dismissal of any action
without prejudice, the Company shall indemnify the Indemnitee
against all expenses actually and reasonably incurred in connection
with the investigation, defense or appeal of such proceeding.
5. Partial Indemnification . If the Indemnitee is
entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of any expenses or liabilities
of
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any type whatsoever (including, but not limited
to, judgments, fines or penalties) actually and reasonably incurred
by him in the investigation, defense, settlement or appeal of a
proceeding but is not entitled, however, to indemnification for the
total amount thereof, the Company shall nevertheless indemnify the
Indemnitee for the portion thereof to which the Indemnitee is
entitled.
6. Indemnification For Expenses of a Witness .
Notwithstanding any other provision of this Agreement, to the
fullest extent permitted by applicable law and to the extent that
Indemnitee is, by reason of his status as an agent, a witness in
any proceeding to which Indemnitee is not a party, he shall be
indemnified against all expenses actually and reasonably incurred
by him or on his behalf in connection therewith.
7. Advancement of Expenses . Subject to
Section 15(b) below, the Company shall advance, to the fullest
extent not prohibited by law, all expenses incurred by the
Indemnitee in connection with the investigation, defense,
settlement or appeal of any proceeding to which the Indemnitee is a
party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an agent of the Company. Advances
shall be unsecured and interest free. Advances shall be made
without regard to Indemnitee’s ability to repay the expenses
and without regard to Indemnitee’s ultimate entitlement to
indemnification under other provisions of this Agreement. Advances
shall include all reasonable expenses incurred pursuing an action
to enforce this right of advancement, including expenses incurred
preparing and forwarding statements to the Company to support the
advances claimed. By signing this Agreement, the Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined that the Indemnitee
is not entitled to be indemnified by the Company as authorized by
this Agreement. The advances to be made hereunder shall be paid by
the Company to or on behalf of the Indemnitee within thirty
(30) days following delivery of a written request therefor by
the Indemnitee to the Company.
8. Notice and Other Indemnification Procedures .
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(a) Notification of Proceeding . Promptly after receipt
by the Indemnitee of notice of the commencement of or the threat of
commencement of any proceeding, the Indemnitee shall, if the
Indemnitee believes that indemnification with respect thereto may
be sought from the Company under this Agreement, notify the Company
of the commencement or threat of commencement thereof. The failure
of Indemnitee to so notify the Company or comply with any other
provision of this Section 8 shall not itself relieve the
Company of any obligation which it may have to the Indemnitee under
this Agreement or otherwise.
(b) Request for Indemnification . Any indemnification
requested by the Indemnitee under Section 3 hereof shall be
made no later than sixty (60) days after receipt of the
written request of the Indemnitee, unless a good faith
determination is made within said 60-day period in accordance with
one of the methods set forth in Section 3(c) above that the
Indemnitee is not or (subject to final judgment or other final
adjudication as provided in Section 15(a) below) ultimately
will not be entitled to indemnification hereunder.
9. Assumption of Defense . In the event the Company shall
be obligated to pay the expenses of any proceeding against the
Indemnitee, the Company, if appropriate, shall be entitled to
assume the defense of such proceeding, with counsel reasonably
acceptable to the Indemnitee, upon
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the delivery to the Indemnitee of written notice
of its election to do so. After delivery of such notice, approval
of such counsel by the Indemnitee and the retention of such counsel
by the Company, the Company shall not be liable to the Indemnitee
under this Agreement for any fees of counsel subsequently incurred
by the Indemnitee with respect to the same proceeding, provided
that (a) the Indemnitee shall have the right to employ his
counsel in such proceeding at the Indemnitee’s expense; and
(b) if (i) the employment of counsel by the Indemnitee
has been previously authorized in writing by the Company,
(ii) the Indemnitee’s counsel delivers a written notice
to the Company stating that such counsel has reasonably concluded
that there may be a conflict of interest between the Company and
the Indemnitee in the conduct of any such defense, (iii) a
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