Exhibit 10.20
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (the
“Agreement”) is made and entered into as of this
day of
, 20 , by and between Phosphate
Holdings, Inc., a Delaware corporation (the “Company”),
and
(“Indemnitee”).
RECITALS:
A. 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 he be indemnified to
the fullest extent permitted by law.
B. The Certificate of Incorporation
of the Company requires the Company to indemnify its directors and
officers to the fullest extent permitted by law.
C. Indemnitee is serving as a
director and/or officer of the Company.
AGREEMENTS:
NOW, THEREFORE, in consideration of
the foregoing premises, Indemnitee’s agreement to serve the
Company, directly or, at its request, another enterprise, and the
covenants contained in this Agreement, the Company and Indemnitee
hereby covenant and agree as follows:
1. Certain
Definitions
(a) “ Acquiring Person
” shall mean any Person other than (i) the Company,
(ii) any of the Company’s Subsidiaries, (iii) any
employee benefit plan of the Company or of a Subsidiary of the
Company or of a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company, (iv) any trustee
or other fiduciary holding securities under an employee benefit
plan of the Company or of a Subsidiary of the Company or of a
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company, or (v) any Person who as of the date of
this Agreement is a “beneficial owner” (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934 (the
“Exchange Act”)), directly or indirectly, of securities
of the Company representing 30% or more of the combined voting
power of the outstanding Voting Securities of the Company until
such time as the Board of Directors of the Company reasonably
believes that such Person has acquired beneficial ownership of any
additional such securities.
(b) A “ Change of
Control ” shall be deemed to have occurred if:
(i) an Acquiring Person is or
becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined
voting power of the then outstanding Voting Securities of the
Company; or
(ii) Incumbent Directors cease for
any reason to constitute a majority of the Board of Directors of
the Company; or
(iii) the stockholders of the
Company approve a merger or consolidation of the Company with any
other corporation or partnership (or, if no such approval is
required, the consummation of such a merger or consolidation of the
Company); or
(iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all the Company’s assets (or, if no such
approval is required, the decision by the Board of Directors of the
Company to proceed with such a liquidation, sale, or disposition in
one transaction or series of related transactions).
(c) “ Claim ”
shall mean any threatened, pending, or completed action, suit, or
proceeding (including, without limitation, securities laws actions,
suits, and proceedings), or any inquiry or investigation (including
discovery), whether conducted by the Company or any other party,
that Indemnitee in good faith believes might lead to the
institution of any action, suit, or proceeding, whether civil,
criminal, administrative, investigative, or other.
(d) “ Expenses ”
shall mean all costs, expenses (including attorneys’ and
expert witnesses’ fees), and obligations paid or incurred in
connection with investigating, defending (including affirmative
defenses and counterclaims), being a witness in, or participating
in (including on appeal), or preparing to defend, be a witness in,
or participate in, any Claim relating to any Indemnifiable
Event.
(e) “ Incumbent
Directors ” shall mean individuals who, as of the date
hereof, constitute the Board of Directors of the Company and any
other individual who becomes a director of the Company after that
date and whose election or appointment by the Board of Directors or
nomination for election by the Company’s stockholders was
approved by a vote of a majority of the directors then still in
office who either are directors as of the date hereof or whose
election, appointment, or nomination for election was previously so
approved.
(f) “ Indemnifiable
Event ” shall mean an event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee,
agent, or fiduciary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, trustee,
agent, or fiduciary of another corporation, partnership, joint
venture, employee benefit plan, trust, or other enterprise, or by
reason of any thing done or not done by Indemnitee in any such
capacity. For purposes of this Agreement, the Company agrees that
Indemnitee’s service on behalf of or with respect to any
Subsidiary of the Company shall be deemed to be at the request of
the Company.
(g) “ Person ”
shall mean any person or entity of any nature whatsoever,
specifically including an individual, a firm, a company, a
corporation, a partnership, a trust or other entity. A Person,
together with that Person’s Affiliates and Associates (as
those terms are defined in Rule 12b-2 under the Exchange Act), and
any Persons acting as a partnership, limited partnership, joint
venture, association, syndicate, or other group (whether or not
formally organized), or otherwise acting jointly or in concert or
in a coordinated or consciously parallel
2
manner (whether or not pursuant to
any express agreement), for the purpose of acquiring, holding,
voting, or disposing of securities of the Company with such Person,
shall be deemed a single “Person.”
(h) A “ Potential Change of
Control ” shall be deemed to have occurred if
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change of Control,
(ii) any Person (including the Company) publicly announces an
intention to take or to consider taking actions that, if
consummated, would constitute a Change of Control, or
(iii) the Board of Directors of the Company adopts a
resolution to the effect that, for purposes of this Agreement, a
Potential Change of Control has occurred.
(i) “ Reviewing Party
” shall mean (i) any appropriate person or body
consisting of a member or members of the Company’s Board of
Directors or (ii) any other person or body appointed by the
Board (including Special Counsel referred to in Section 3) who
is not a party to the particular Claim for which Indemnitee is
seeking indemnification.
(j) “S pecial Counsel
” shall mean special, independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld), and who has not otherwise performed
services for the Company or for Indemnitee within the last three
years (other than as Special Counsel under this Agreement or
similar agreements).
(k) “ Subsidiary
” shall mean, with respect to any Person, any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or
indirectly, by that Person.
(l) “ Voting Securities
” shall mean any securities that vote generally in the
election of directors or in the selection of any other similar
governing body.”
2. Basic Indemnification and
Expense Reimbursement Arrangement
(a) In the event Indemnitee was, is,
or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant
in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable but in any
event no later than 30 days after written demand is presented to
the Company, against any and all Expenses, judgments, fines,
penalties, and amounts paid in settlement (including all interest,
assessments, and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties, or
amounts paid in settlement) of or with respect to that Claim.
Notwithstanding the foregoing, the obligations of the Company under
Section 2(a) shall be subject to the condition that the
Reviewing Party shall not have determined (in a written unqualified
opinion, in any case in which Special Counsel referred to in
Section 3 hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law. Nothing contained
in this Agreement shall require any determination under this
Section 2(a) to be made by the Reviewing Party prior to the
disposition or conclusion of the Claim against the Indemnitee;
provided, however, that Expense Advances shall continue to be made
by the Company pursuant to and to the extent required by the
provisions of Section 2(b).
3
(b) If so requested by Indemnitee,
the Company shall pay any and all Expenses incurred by Indemnitee
(or, if applicable, reimburse Indemnitee for any and all Expenses
incurred by Indemnitee and previously paid by Indemnitee) within
ten business days after such request (an “Expense
Advance”). The Company shall be obligated to make or pay an
Expense Advance in advance of the final disposition or conclusion
of any Claim. In connection with any request for an Expense
Advance, if requested by the Company, Indemnitee or
Indemnitee’s counsel shall submit an affidavit stating that
the Expenses incurred were reasonable. Any dispute as to the
reasonableness of any Expense shall not delay an Expense Advance by
the Company, and the Company agrees that any such dispute shall be
resolved only upon the disposition or conclusion of the underlying
Claim against the Indemnitee. If, when, and to the extent that the
Reviewing Party determines that Indemnitee would not be permitted
to be indemnified with respect to a Claim under applicable law, the
Company shall be entitled to be reimbursed by Indemnitee and
Indemnitee hereby agrees to reimburse the Company without interest
(which agreement shall be an unsecured obligation of Indemnitee)
for all related Expense Advances theretofore made or paid by the
Company; provided, however, that if Indemnitee has commenced 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 Reviewing Board 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 Expense Advance, and the
Company shall be obligated to continue to make Expense Advances,
until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or
lapsed). If there has not been a Change of Control, the Reviewing
Party shall be selected by the Board of Directors of the Company.
If there has been a Change of Control, the Reviewing Party shall be
advised by or shall be Special Counsel referred to in
Section 3 hereof, if and as Indemnitee so requests. If there
has been no determination by the Reviewing Party or if the
Reviewing Party determines that Indemnitee substantively would not
be permitted to be indemnified in whole or in part under applicable
law, Indemnitee shall have the right to commence litigation in any
court in the states of Delaware or Mississippi having subject
matter jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the
Company hereby consents to service of process and to appear in any
such proceeding. In the absence of any such litigation, any
determination by the Reviewing Party shall be conclusive and
binding on the Company and Indemnitee.
3. Change of Control . The
Company agrees that, if there is a Change of Control and if
Indemnitee requests in writing that Special Counsel advise the
Reviewing Party or be the Reviewing Party, then the Company shall
not deny any indemnification payments (and Expense Advances shall
continue to be paid by the Company pursuant to Section 2(b))
that Indemnitee requests or demands under this Agreement or any
other agreement or law now or hereafter in effect relating to
Claims for Indemnifiable Events; provided, however, that the
Reviewing Party shall not have determined (in a written unqualified
opinion, in any
