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Exhibit
10.34
INDEMNIFICATION
AGREEMENT
This Indemnification
Agreement (the “Agreement”) is made and entered into as
of the day
of
,
by and between Standard Pacific Corp., a Delaware corporation (the
“Company”), and
(“Indemnitee”).
RECITALS
WHEREAS, Indemnitee has been
elected to serve as an officer and/or director of the Company;
and
WHEREAS, there is a general
awareness that competent and experienced persons are becoming more
reluctant to serve as directors or officers of a corporation unless
they are protected by comprehensive insurance or indemnification,
especially since stockholder and derivative lawsuits against
publicly held corporations, their directors and officers for
line-of-duty decisions and actions have increased in number in
recent years for damages in amounts which have no reasonable or
logical relationship to the amount of compensation received by the
directors or officers from the corporation; and
WHEREAS, the vagueries of
“public policy” and the interpretations of ambiguous
statutes, regulations and bylaws are too uncertain to provide
corporate officers and directors with adequate, reliable knowledge
of legal risks to which they may be exposed; and
WHEREAS, damages sought by
class action plaintiffs in some cases amount to tens of millions of
dollars and, whether or not the case is meritorious, the cost of
defending them is enormous with few individual directors and
officers having the resources to sustain such legal costs, not to
mention the risk of a judgment running into millions even in cases
where the defendant was neither culpable nor profited personally to
the detriment of the corporation; and
WHEREAS, it is generally
recognized that the issues and controversy in such litigation are
usually related to the knowledge, motives and intent of the
director or officer and that he or she is usually the only witness
with first-hand knowledge of the essential facts or of exculpating
circumstances who is qualified to testify in his or her defense
regarding matters of such subjective nature, and that the long
period of time which normally and usually lapses before such suits
can be disposed of can extend beyond the normal time for retirement
of a director or officer with the result that, after retirement or
even in the event of death, his or her spouse, heirs, executors or
administrators, as the case may be, may be faced with limited
ability, undue hardship and an intolerable burden in launching and
maintaining a proper and adequate defense of the director or
officer or his or her estate against claims for damages;
and
WHEREAS, the Board of
Directors of the Company, based upon their experience as business
managers, have concluded that the continuation of present trends in
litigation against corporate directors and officers will inevitably
result in less effective direction and supervision of the Company
and its subsidiaries’ and affiliates’ business affairs
and the operation of their facilities, as opposed to aggressive
supervision and management in a search for profits, and the board
deems such consequences to be so detrimental to the best interests
of the Company’s
stockholders that it has concluded that
its directors and officers should be provided with maximum
protection against inordinate risks in order to ensure that the
most capable persons otherwise available will be attracted to such
positions and therefore, the directors have further concluded that
it is not only reasonable and prudent but necessary for the Company
contractually to obligate itself to .indemnify in a reasonable and
adequate manner its directors and officers and the directors and
officers of its affiliates; and
WHEREAS, Section 145 of
the Delaware General Corporation Law, under which the Company is
organized, empowers corporations to indemnify persons serving as a
director, officer, employee or agent of the corporation or a person
who serves at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, and further specifies
that the indemnification set forth in said section “shall not
be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise,” and
said section further empowers a corporation to “purchase and
maintain insurance” (on behalf of such persons) against any
liability asserted against him or her or incurred by him or her .n
any such capacity or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify
such person against such liability under the provisions of said
laws; and
WHEREAS, the Company and its
predecessors have investigated the type of insurance available, the
nature and extent of the coverage provided and the cost thereof to
the Company to insure the directors and officers of the Company and
of its affiliates against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by any such director or officer in connection
with any action, suit or proceeding with which he or she is
threatened or made a party by reason of such status and/or his or
her line-of-duty decisions or actions, and, upon receiving such
information, the directors of the Company have determined that the
coverage available is inadequate for the Company and its directors,
officers and agents and that its stockholders’ best interests
would be served by the Company contracting to indemnify such
persons and to thereby effectively self-insure against such
potential liabilities not covered by insurance; and
WHEREAS, the Company desires
to have Indemnitee serve and continue to serve as a director and/or
officer of the Company or of any other corporation, subsidiary,
partnership, joint venture, or trust or other enterprise (herein
called “an Affiliate of the Company”} of which he or
she has been or is serving at the request, for the convenience of
or to represent the interest of the Company free from undue concern
for unpredictable, inappropriate or unreasonable claims for damages
by reason of his or her being a director or officer of the Company
or of an Affiliate of the Company or by reason of his or her
decisions or actions on their behalf and Indemnitee desires to
serve or continue to serve (provided that he or she is furnished
the indemnity provided for hereinafter}, in one or more of such
capacities.
NOW, THEREFORE, in
consideration of the premises and covenants contained herein, the
Company and the Indemnitee hereby agree as follows:
1.
Definitions.
“Litigation
Costs” means costs, charges and expenses, including
attorneys’, accountants’ and expert witness fees,
reasonably incurred in the investigation, defense or prosecution of
or other involvement in any Proceeding and any appeal therefrom,
and the cost of appeal, attachment and similar bonds.
“Losses” means
the total amount which Indemnitee becomes legally obligated to pay
in connection with any Proceeding, including judgments, fines,
amounts paid in settlement and Litigation Costs.
“Proceeding”
means any threatened, pending or completed action, suit, proceeding
or investigation, whether civil, criminal, administrative or
investigative (whether external or internal to the Company,
including an action by or in the right of the Company}, and whether
formal or informal.
2. Agreement to Serve.
Indemnitee will serve and/or continue to serve, at the will of the
Company or its stockholders or under separate contract, if such
exists, the Company or an Affiliate of the Company as a director
and/or officer faithfully and to the best of his or her ability so
long as he or she is duly elected and qualified in accordance with
the provisions of the bylaws thereof or until such time as he or
she tenders his or her resignation in writing or is removed from
office.
3.
Indemnification.
(a) The Company shall
indemnify Indemnitee:
(i) If Indemnitee is a person
who was or is a party or is threatened to be made a party to, or
otherwise becomes involved in, any Proceeding (other than an action
by or in the right of the Company or an Affiliate of the Company)
by reason of the fact that he or she is or was a director, officer,
employee or agent of the Company or is or was serving at the
request of the Company as a director, officer, employee or agent of
the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (hereinafter
called an “Affiliate”), or by reason of anything done
or not done by him or her in any such capacity, against Losses
actually incurred by him or her in connection with such Proceeding
if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests
of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his or her
conduct was unlawful; or
(ii) If Indemnitee is a
person who was or is a party or is threatened to be made a party
to, or otherwise becomes involved in, any Proceeding by or in the
right of the Company or an Affiliate of the Company to procure a
judgment in its favor by reason of the fact that he or she is or
was a director, officer, employee or agent of the Company or is or
was serving at the request of the Company or an Affiliate of the
Company as a director, officer,
employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
or by reason of anything done or not done by him or her in any such
capacity, against Litigation Costs actually incurred by him or her
in connection with such Proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Company and except that no
indemnification under this subsection shall be made in respect of
any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Company unless and only to the extent
that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the relevant
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper; or
(iii) To the extent
Indemnitee has been successful on the merits or otherwise in
defense of any Proceedings referred to in subsections (a) or
(b) of this section, or in the defense of any claim, issue or
matter described therein, against Litigation Expenses actually
incurred by him or her in connection with the investigation,
defense or appeal of such action, suit or proceeding. If Indemnitee
is not wholly successful in such Proceedings, but is successful on
the merits or otherwise as to one or more, but less than all,
claims, issues or matters in such Proceedings, the Company shall
indemnify Indemnitee against all Litigation Expenses incurred by
Indemnitee or on his or her behalf in connection with the
successfully resolved claim, issue or matter. For purposes of this
Section 3 and without limitation, the termination of any
Proceedings by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent shall not, of
itself, create a presumption (1) that Indemnitee did not act
in good faith and in a manner which he or she reasonably believed
to be in or not opposed to the best interests of the Company, or
(2) with respect to any criminal action or proceeding, that
Indemnitee had reasonable cause to believe that his or her conduct
was criminal.
(b) The protectio
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