Exhibit 10.1
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the “Agreement”) is made
and entered into as of this 25th day of July, 2007, by and between
TOTAL SYSTEM SERVICES, INC., a Georgia corporation (the
“Company”), and _____________________
(“Indemnitee”). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in Section
16.
RECITALS :
WHEREAS , Indemnitee
performs a valuable service for the Company;
WHEREAS , the Bylaws of
the Company (the “Bylaws”) and the Georgia Business
Corporation Code, as amended (the “GBCC”), by their
nonexclusive nature, permit contracts between the Company and the
[directors/officers] of the Company with respect to indemnification
of such officers or directors;
WHEREAS , the Board of
Directors of the Company has determined that the continuation of
present trends in litigation will make it more difficult to attract
and retain competent and experienced persons to serve as
[directors/officers] that this situation is detrimental to the best
interests of the Company’s shareholders and that therefore
the Company should act to assure its [directors/officers] that
there will be increased certainty of indemnification protection in
the future;
WHEREAS , this
Agreement is a supplement to the provisions of the GBCC and the
Bylaws and any resolutions adopted pursuant thereto and shall not
be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder; and
WHEREAS , in
recognition of the need to provide Indemnitee with substantial
protection against personal liability and in order to induce
Indemnitee to continue to serve as a [director/officer] of the
Company, the Company has determined and agreed to enter into this
Agreement with Indemnitee;
NOW, THEREFORE , in
consideration of Indemnitee’s service as a [director/officer]
after the date hereof, the parties hereto agree as
follows:
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1.
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Indemnification of Indemnitee
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(a) Subject
to Section 5, the Company hereby agrees to hold harmless and
indemnify Indemnitee if Indemnitee is a party to a Proceeding by
reason of Indemnitee’s Corporate Status to the maximum extent
not prohibited by the GBCC, as the same now exists or may hereafter
be amended (but only to the extent any such amendment permits the
Company to provide broader indemnification rights than the GBCC
permitted the Company to provide prior to such amendment);
provided, however, that except as provided in Section 6, Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with a Proceeding
initiated by Indemnitee (other than in a Corporate Status capacity)
against the Company or any director or officer of the Company
unless the Company has joined in or consented in writing to the
initiation of such action.
(b) In
addition, to the extent that Indemnitee is a witness in any
Proceeding, Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith.
(c) Notwithstanding
the foregoing or any other provision of this Agreement, the Company
shall not be obligated to indemnify Indemnitee for expenses and the
payment of profits by Indemnitee arising from the purchase and sale
by Indemnitee of securities in violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the “1934
Act”), or any similar successor statute;
provided ,
however , that the
Company may advance expenses in accordance with Section 2 of this
Agreement in connection with Indemnitee’s defense of a claim
under Section 16(b) of the 1934 Act, which advances shall be repaid
to the Company if it is ultimately determined that Indemnitee is
not entitled to indemnification of such expenses.
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2.
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Advancement of Expenses .
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(a)
Procedure for Advancement of Expenses
. The Company shall pay for or reimburse the
Expenses incurred by Indemnitee if Indemnitee was or is a party to
a Proceeding because of Indemnitee’s Corporate Status in
advance of final disposition of the Proceeding if:
(i) Indemnitee
furnishes the Company a written affirmation, in a form reasonably
acceptable to the Company, of Indemnitee’s good faith belief
that Indemnitee has met the standard of conduct set forth in the
GBCC or that the Proceeding involves conduct for which liability
has been eliminated under a provision of the Articles of
Incorporation as authorized by Section 14-2-202(b)(4) of the
GBCC; and
(ii) Indemnitee
furnishes the Company a written undertaking, in a form reasonably
satisfactory to the Company, to repay any advances if it is
ultimately determined that Indemnitee is not entitled to
indemnification under this Agreement. Such undertaking must be an
unlimited general obligation of Indemnitee but need not be secured
and may be accepted without reference to the financial ability of
Indemnitee to make repayment.
(b) Notwithstanding
any other provision of this Agreement, the Company shall advance
any and all Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding to which Indemnitee is a party by
reason of Indemnitee’s Corporate Status within fifteen (15)
business days after Indemnitee has presented the affirmation and
undertaking required pursuant to Section 2(a). Any advances and
undertakings to repay pursuant to this Section 2 shall be unsecured
and interest free. Notwithstanding the foregoing, the obligation of
the Company to advance Expenses pursuant to this Section 2 shall be
subject to the condition that, if, when and to the extent that the
Company determines that Indemnitee would not be permitted to be
indemnified under applicable law, the Company shall be reimbursed,
within thirty (30) days of such determination, by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided
, however
, that if Indemnitee has
commenced or thereafter commences legal proceedings
in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any
determination made by the Company that Indemnitee would not be
permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the
Company for any advance of Expenses until a final judicial
determination is made with respect thereto (as to which all rights
of appeal therefrom have been exhausted or lapsed).
3.
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 shall be indemnified
against reasonable Expenses incurred by Indemnitee in connection
with the Proceeding, regardless of whether Indemnitee has met the
standards set forth in the GBCC and without any action or
determination in accordance with Section 5. 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
or on behalf of Indemnitee in connection with each successfully
resolved claim, issue or matter.
4.
Partial Indemnification . If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion
of any costs, claims or losses but not for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled.
5.
Procedures and Presumptions for Determination of
Entitlement to Indemnification . It is
the intent of this Agreement to secure for Indemnitee rights of
indemnification that are as favorable as may be permitted under the
law and public policy of the State of Georgia. Accordingly, the
parties agree that the following procedures and presumptions shall
apply in the event of any question as to whether Indemnitee is
entitled to indemnification under this Agreement (
provided ,
however , in the event
the procedures for determination of entitlement to indemnification
as currently set forth in the GBCC are amended to create any
material inconsistency between such procedures in the GBCC and the
procedures set forth below, the procedures set forth below shall
also be deemed to be amended in the same manner to the extent
necessary to remove the inconsistency without any further action on
the part of the Company or Indemnitee):
(a) To
obtain indemnification (including, but not limited to, the
advancement of Expenses) under this Agreement, Indemnitee shall
submit to the Company a written request in form reasonably
satisfactory to the Company, including therein or therewith such
documentation and information as is reasonably available to
Indemnitee and is reasonably necessary, in the Company’s
opinion, to determine whether and to what extent Indemnitee is
entitled to indemnification. The General Counsel of the Company (or
in the absence of the General Counsel, the Chief Financial Officer
of the Company) shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification. Any Expenses incurred by
Indemnitee in connection with Indemnitee’s request for
indemnification hereunder shall be borne by the Company. The
Company hereby indemnifies and agrees to hold Indemnitee harmless
for any Expenses incurred
by Indemnitee under the immediately preceding
sentence irrespective of the outcome of the determination of
Indemnitee’s entitlement to indemnification.
(b) The
Company shall not indemnify Indemnitee under Section 1(a) unless a
determination has been made for a specific Proceeding that
indemnification of Indemnitee is permissible because Indemnitee has
met the standards set forth in the GBCC. The determination shall be
made:
(i) If there are
two or more Disinterested Directors, by the Board of Directors by a
majority vote of all the Disinterested Directors (a majority of
whom shall for such purpose constitute a quorum) or by a majority
of the members of a committee of two or more Disinterested
Directors appointed by such a vote;
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(ii)
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By special legal counsel
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(A) selected in
the manner prescribed in paragraph (i) of this subsection;
or
(B) if there are
fewer than two Disinterested Directors, selected by the Board of
Directors (in which selection directors who do not qualify as
Disinterested Directors may participate); or
(iii) By the
shareholders, but the shares owned by or voted under the control of
the officers and directors who are at the time parties to the
Proceeding may not be voted on the determination;
provided, however, that following a Change of
Control of the Company, with respect to all matters thereafter
arising out of acts, omissions or events prior to the Change of
Control of the Company concerning the rights of Indemnitee to seek
indemnification under this Section 5, such determination shall be
made by special legal counsel nominated by Indemnitee and selected
by the Board of Directors or its committee in the manner described
in Section 5(b)(ii) above (which selection shall not be
unreasonably withheld), which counsel has not otherwise performed
services (other than in connection with similar matters) within the
five years preceding its engagement to render such opinion for
Indemnitee or for the Company or any affiliates (as such term is
defined in Rule 405 under the Securities Act of 1933, as amended)
of the Company (whether or not they were affiliates when services
were so performed) ("Independent Counsel"). If Indemnitee fails to
nominate Independent Counsel within ten (10) business days
following written request by the Company to nominate Independent
Counsel, legal counsel selected by a resolution or resolutions of
the Board of Directors of the Company prior to a Change of Control
of the Company shall be deemed to have been selected by the Company
as required. Such Independent Counsel shall determine as promptly
as practicable whether and to what extent
Indemnitee would be permitted to be indemnified
under applicable law and shall render a written opinion to the
Company and to Indemnitee to such effect. The Company agrees to pay
the reasonable fees of the Independent Counsel referred to above
and to fully indemnify such Independent Counsel against any and all
expenses, claims, liabilities and damages arising out of or
relating to this Section 5 or its engagement pursuant
hereto.
(c) If the
person, persons or entity empowered or selected under Section 5(b)
to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within thirty (30) days after
receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in
connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law;
provided, however ,
that such thirty (30) day period may be extended for a reasonable
time, not to exceed an additional thirty (30) days, if the person,
persons or entity making the determination with respect to
entitlement to indemnification in good faith requires such
additional time for the obtaining or evaluating documentation
and/or information relating thereto; and provided, further , that the
foregoing provisions of this Section 5(c) shall not apply if
the determination of entitlement to indemnification is to be made
by the shareholders pursuant to Section 5(b)(iii) of this Agreement
and if within fifteen (15) days after receipt by the Company of the
request for such determination (A) the Board of Directors or the
Disinterested Directors, if appropriate, resolve to submit such
determination to the shareholders for their consideration at an
annual meeting thereof to be held within ninety (90) days after
such receipt and such determination is made thereat, or (B) a
special meeting of shareholders is called for the purpose of making
such determination, the meeting is held for such purpose within
ninety (90) days after having been so called and the determination
is made at the meeting.
(d) Indemnitee shall
cooperate with the person, persons or entity making such
determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any Independent
Counsel, member of the Board of Directors, or shareholder of the
Company shall act reasonably and in good faith in making a
determination under the Agreement of Indemnitee’s
ent