Exhibit 10.17
HOMEOWNERS CHOICE,
INC.
INDEMNIFICATION
AGREEMENT
as of
, 2009
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the
“ Agreement ”) is made and entered into as of
____________, 2009 between HOMEOWNERS CHOICE, INC., a Florida
corporation (the “Company” ), and __________ (
“Indemnitee” ).
WITNESSETH THAT:
WHEREAS, highly competent persons
have become more reluctant to serve corporations as directors,
officers or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising
out of their service to and activities on behalf of the
corporation;
WHEREAS, the Board of Directors of
the Company (the “Board”) has determined that, in order
to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its
subsidiaries 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,
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, officers, and other persons in service to corporations
or business enterprises are being increasingly subjected to
expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only
against the Company or business enterprise itself. The bylaws of
the Company (as amended, the “Bylaws”) direct the
Company to indemnify the officers and directors of the Company.
Indemnitee may also be entitled to indemnification pursuant to the
Florida Business Corporation Act, Chapter 607, Florida Statutes
(“FBCA”). The FBCA expressly provides 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 of directors, officers and other
persons with respect to indemnification;
WHEREAS, the uncertainties relating
to such insurance and to indemnification have increased the
difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined
that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons
that there will be increased certainty of such protection in the
future;
WHEREAS, it is reasonable, prudent
and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses 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;
WHEREAS, this Agreement is a
supplement to and in furtherance of the Bylaws of the Company and
any resolutions adopted pursuant thereto, and will not be deemed a
substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder; and
WHEREAS, Indemnitee does not regard
the protection available under the Company’s Articles and
insurance as adequate in the present circumstances, and may not be
willing to serve as an officer or director without adequate
protection, and the Company desires Indemnitee to serve in such
capacity. Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the
condition that Indemnitee be so indemnified.
NOW, THEREFORE, in consideration of
Indemnitee’s agreement to serve as an officer or director of
the Company from and after the date hereof, the parties hereto
agree as follows:
1. Indemnity of Indemnitee .
The Company hereby agrees to hold harmless and indemnify Indemnitee
to the fullest extent permitted by law, as such may be amended from
time to time. The following agreements are in furtherance of the
foregoing indemnification, and do not limit the generality of the
preceding sentence.
(a) Proceedings Other Than
Proceedings by or in the Right of the Company . Indemnitee will
be entitled to the rights of indemnification provided in this
Section l(a) if, by reason of the Indemnitee’s
Corporate Status (as hereinafter defined), the Indemnitee is, or is
threatened to be made, a party to or participant in any Proceeding
(as hereinafter defined) other than a Proceeding by or in the right
of the Company. Pursuant to this Section 1(a) ,
Indemnitee will be indemnified against all Expenses (as hereinafter
defined), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by the Indemnitee, or
on the indemnitee’s behalf, in connection with such
Proceeding or any claim, issue or matter therein, if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal Proceeding, had no
reasonable cause to believe the Indemnitee’s conduct was
unlawful.
(b) Proceedings by or in the
Right of the Company . Indemnitee will be entitled to the
rights of indemnification provided in this Section 1(b)
if, by reason of Indemnitee’s Corporate Status, the
Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding brought by or in the right of the
Company. Pursuant to this Section 1(b) , Indemnitee
will be indemnified against all Expenses actually and reasonably
incurred by the Indemnitee, or on the Indemnitee’s behalf, in
connection with such Proceeding if the Indemnitee acted in good
faith and in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company; provided,
however, if applicable law so provides, no indemnification against
such Expenses will be made in respect of any claim, issue or matter
in such Proceeding as to which Indemnitee has been adjudged to be
liable to the Company unless and to the extent that a court of
competent jurisdiction will determine that such indemnification may
be made.
(c) Indemnification for Expenses
of a Party Who is Wholly or Partly Successful . Notwithstanding
any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a
party to and is successful, on the merits or otherwise, in any
Proceeding, Indemnitee will be indemnified to the maximum extent
permitted by law, as such may be amended from time to time, against
all Expenses actually and reasonably incurred by him or on
Indemnitee’s behalf in connection therewith. 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 will indemnify
Indemnitee against all Expenses actually and reasonably incurred by
him or on
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Indemnitee’s behalf in
connection with each successfully resolved claim, issue or matter.
For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, will be deemed to be a
successful result as to such claim, issue or matter.
2. Additional Indemnity . In
addition to, and without regard to any limitations on, the
indemnification provided for in Section 1 of this
Agreement, the Company will and hereby does indemnify and hold
harmless Indemnitee against all Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably
incurred by him or on Indemnitee’s behalf if, by reason of
Indemnitee’s Corporate Status, Indemnitee is, or is
threatened to be made, a party to or participant in any Proceeding
(including a Proceeding by or in the right of the Company), to the
fullest extent permissible under applicable law.
3. Contribution .
(a) Whether or not the
indemnification provided in Sections 1 and 2 hereof
is available, in respect of any threatened, pending or completed
action, suit or proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such action, suit or
proceeding), the Company will pay, in the first instance, the
entire amount of any judgment or settlement of such action, suit or
proceeding without requiring Indemnitee to contribute to such
payment and the Company hereby waives and relinquishes any right of
contribution it may have against Indemnitee. The Company will not
enter into any settlement of any action, suit or proceeding in
which the Company is jointly liable with Indemnitee (or would be if
joined in such action, suit or proceeding) unless such settlement
provides for a full and final release of all claims asserted
against Indemnitee.
(b) Without diminishing or impairing
the obligations of the Company set forth in Section 3(a)
above, if, for any reason, Indemnitee will elect or be required to
pay all or any portion of any judgment or settlement in any
threatened, pending or completed action, suit or proceeding in
which the Company is jointly liable with Indemnitee (or would be if
joined in such action, suit or proceeding), the Company will
contribute to the amount of Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred and paid or
payable by Indemnitee in proportion to the relative benefits
received by the Company and all officers, directors or employees of
the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand,
from the transaction from which such action, suit or proceeding
arose; provided, however, that the proportion determined on the
basis of relative benefit may, to the extent necessary to conform
to law, be further adjusted by reference to the relative fault of
the Company and all officers, directors or employees of the Company
other than Indemnitee who are jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), on the one
hand, and Indemnitee, on the other hand, in connection with the
events that resulted in such expenses, judgments, fines or
settlement amounts, as well as any other equitable considerations
which the law may require to be considered. The relative fault of
the Company and all officers, directors or employees of the
Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand,
will be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal
profit or advantage, the degree to which their liability is primary
or secondary and the degree to which their conduct is active or
passive.
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(c) The Company hereby agrees to
fully indemnify and hold Indemnitee harmless from any claims of
contribution which may be brought by officers, directors or
employees of the Company, other than Indemnitee, who may be jointly
liable with Indemnitee.
(d) To the fullest extent
permissible under applicable law, if the indemnification provided
for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, will
contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any
claim relating to an indemnifiable event under this Agreement, in
such proportion as is deemed fair and reasonable in light of all of
the circumstances of such Proceeding in order to reflect
(i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of
the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or
transaction(s).
4. Indemnification for Expenses
of a Witness . Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a witness, or is made (or
asked to) respond to discovery requests, in any Proceeding to which
Indemnitee is not a party, Indemnitee will be indemnified against
all Expenses actually and reasonably incurred by him or on
Indemnitee’s behalf in connection therewith.
5. Advancement of Expenses .
Notwithstanding any other provision of this Agreement, the Company
will advance all Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding by reason of Indemnitee’s
Corporate Status within ten (10) days after the receipt by the
Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or
statements will reasonably evidence the Expenses incurred by
Indemnitee and will include or be preceded or accompanied by an
undertaking by or on behalf of Indemnitee to repay any Expenses
advanced if it will ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses. Any advances and
undertakings to repay pursuant to this Section 5 will
be unsecured and interest free.
6. Procedures and Presumptions
for Determination of Entitlement to Indemnification . It is the
intent of this Agreement to secure for Indemnitee rights of
indemnity that are as favorable as may be permitted under the FBCA
(or other applicable law) and public policy. Accordingly, the
parties agree that the following procedures and presumptions will
apply in the event of any question as to whether Indemnitee is
entitled to indemnification under this Agreement:
(a) To obtain indemnification under
this Agreement, Indemnitee will submit to the Company a written
request, including such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to
determine whether and to what extent Indemnitee is entitled to
indemnification. Promptly upon receipt of such a request for
indemnification, the Secretary of the Company will advise the Board
in writing that Indemnitee has requested indemnification.
Notwithstanding the foregoing, any failure of Indemnitee to provide
such a request to the Company, or to provide such a request in a
timely fashion, will not relieve the Company of any liability that
it may have to Indemnitee unless, and to the extent
that,
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such failure actually and materially
prejudices the interests of the Company. The determination of
whether Indemnitee is entitled to indemnification will be made by,
at the option of Indemnitee, (i) majority vote of the
disinterested members of the Board or (ii) Independent
Counsel.
(b) If the determination of
entitlement to indemnification is to be made by Independent
Counsel, the Independent Counsel will be selected as provided in
this Section 6(b) . The Independent Counsel will be
selected by the Board. Indemnitee may, within 10 days after such
written notice of selection will have been given, deliver to the
Company, as the case may be, a written objection to such selection;
provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the
requirements of “ Independent Counsel ” as
defined in Section 13 of this Agreement, and the
objection will set forth with particularity the factual basis of
such assertion. Absent a proper and timely objection, the person so
selected will act as Independent Counsel. If a written objection is
made and substantiated, the Independent Counsel selected may not
serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without
merit. If, within 20 days after submission by Indemnitee of a
written request for indemnification pursuant to
Section 6(a) above, no Independent Counsel will have
been selected and not objected to, either the Company or Indemnitee
may petition a court of competent jurisdiction for resolution of
any objection which will have been made by the Indemnitee to the
Company’s selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the
court or by such other person as the court will designate, and the
person with respect to whom all objections are so resolved or the
person so appointed will act as Independent Counsel. The Company
will pay any and all reasonable fees and expenses of Independent
Counsel incurred in connection with Independent Counsel acting in
that capacity, and the Company will pay all reasonable fees and
expenses incident to the procedures of this Section 6(b),
regardless of the manner in which such Independent Counsel was
selected or appointed.
(c) In making a determination with
respect to entitlement to indemnification hereunder, the person or
persons or entity making such determination will presume that
Indemnitee is entitled to indemnification under this Agreement.
Anyone seeking to overcome this presumption will have the burden of
proof and the burden of persuasion by clear and convincing
ev
