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Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of
December 11, 2008, by and between Pzena Investment Management,
Inc., a Delaware corporation (along with any entities referred to
in Section 2(c) below, the "Company"), and Ronald W. Tysoe
("Director").
RECITALS
WHEREAS , highly competent persons have become more
reluctant to serve publicly-held corporations as directors 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 as members of the Board, 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,
such insurance may be available to it in the future only at higher
premiums and with more exclusions. At the same time, directors are
being increasingly subjected to expensive and time-consuming
litigation relating to the business and affairs of
corporations. The Company recognizes that the cost of
defending and otherwise participating in such litigation is far
greater than the financial benefits of serving as a
Director. Article Seventh of the Certificate of
Incorporation of the Company, as in effect on the date hereof, and
the Delaware General Corporation Law ("DGCL") expressly provide
that the indemnification provisions set forth therein are not
exclusive and contemplate that agreements may be entered into
between the Company and members of the Board (or parties serving at
the request of the Board) with respect to indemnification;
WHEREAS , the uncertainties relating to insurance have
increased the difficulty of attracting and retaining directors;
WHEREAS , the Board has determined that the increased
difficulty in attracting and retaining directors is detrimental to
the best interests of the Company's stockholders;
WHEREAS , it is reasonable, prudent and necessary for the
Company contractually to obligate itself to indemnify, and to pay
expenses on behalf of, directors 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 in furtherance of the Amended
and Restated Certificate of Incorporation of the Company, its
Amended and Restated Bylaws and any resolutions adopted pursuant
thereto, and the DGCL, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Director
thereunder;
WHEREAS , the Company has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce
Director to serve as a director or officer of the Company, and the
Company acknowledges that Director is relying upon this Agreement
in serving as a director or officer of the Company; and
WHEREAS , Director 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 so indemnified;
NOW, THEREFORE , in consideration of the promises and the
covenants contained herein, the Company and Director do hereby
covenant and agree as follows:
1. Services to the Company .
Director will serve or continue to serve, at the will
of the Company and its stockholders for so long as Director is duly
elected or appointed or until Director tenders his or her
resignation.
2. Definitions . As
used in this Agreement:
(a) "Beneficial
Owner" shall have the meaning given to such term in Rule 13d-3
under the Securities Exchange Act of 1934.
(b) 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:
(i)
Acquisition of Stock by Third Party . Any Person,
other than a Principal or a Related Party of a Principal (as each
such term is defined below), is or becomes the Beneficial Owner,
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;
(ii)
Change in Board of Directors . During any period
of two (2) consecutive years (not including any period prior to the
execution of this Agreement), individuals who at the beginning of
such period constitute the Board (together with any new directors
whose election to the Board or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of
the directors then still in office who were either directors at the
beginning of such 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,
unless such merger or consolidation 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, including the parent corporation of such
surviving entity) at least 50% of the total 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 of directors or other governing body
of such surviving entity;
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(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
(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.
(c) "Company"
shall include, in addition to Pzena Investment Management, Inc.,
any corporation, partnership, joint venture, limited liability
company, trust or other enterprise of which such Director is or was
serving as a director, officer, employee or agent of at the request
of the Company, or any corporation which results from or survives a
consolidation or merger with Pzena Investment Management, Inc., as
well as any corporation resulting from a consolidation or merger
which, if its separate existence had continued, would have had
power and authority to indemnify its directors, officers, employees
or agents, so that if Director is or was a director, officer,
employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, limited liability company ,
trust or other enterprise, Director shall stand in the same
position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Director would have with
respect to such constituent corporation if its separate existence
had continued.
(d) "Disinterested
Director" means a director of the Company who is not and was not a
party to the Proceeding as defined herein in respect of which
indemnification is sought by Director.
(e) "Enterprise"
shall mean the Company and any other corporation, partnership,
limited liability company, joint venture, trust, employee benefit
plan or other enterprise of which Director is or was serving at the
request of the Company as a director, officer, employee, agent or
fiduciary.
(f) "Exchange
Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "Expenses"
shall include all reasonable attorneys' and accountants’
fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees,
and all other disbursements or expenses of the types customarily
incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise being involved with, a Proceeding as
defined in this Agreement. Expenses also shall include Expenses
incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for,
and other costs relating to any cost bond, supersedeas bond, or
other appeal bond or its equivalent. Expenses, however, shall not
include amounts paid in settlement by Director or the amount of
judgments or fines against Director.
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(h) "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 Director in any matter material to either such party 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 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
Director in an action to determine Director's rights under this
Agreement.
(i) "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 or a person or entity that directly or indirectly
controls, is controlled by, or is under common control with, 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.
(j) "Principal"
means Richard S. Pzena, John P. Goetz, William L. Lipsey, A. Rama
Krishna and Joel Greenblatt.
(k) The
term "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation (including but not limited to any internal
corporate investigation), inquiry, administrative hearing or any
other actual, threatened or completed proceeding, including any and
all appeals, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or
investigative nature, in which Director was, is, or will be a party
to, a witness in or otherwise participates in by reason of the fact
that Director 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, officer, employee or agent of another 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 payment of expenses can be provided under this
Agreement; except one initiated by a Director to enforce his rights
under this Agreement. Any Director serving, in any
capacity, (i) another corporation of which a majority of the shares
entitled to vote in the election of its directors is held by the
Company, or (ii) any employee benefit plan of the Company or of any
corporation referred to in clause (i), shall be deemed to be doing
so at the request of the Company.
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(l) "Related
Party" means: (1) in the case of an individual, any immediate
family member of any Principal; or (2) any trust, corporation,
partnership, limited liability company or other entity, the
beneficiaries, stockholders, partners, members, owners or Persons
beneficially holding an 80% or more controlling interest of which
consist of any one or more Principals and/or such other Persons
referred to in the immediately preceding clause (1).
(m) References
to "fines" shall include, but are not limited to, any excise tax
assessed with respect to any employee benefit plan; references to
"serving at the request of the Company" shall include any service
as a director, officer, employee or agent of the Company which
imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith
and in a manner he reasonably believed to be in the best interests
of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best
interests of the Company" as referred to in this Agreement.
3. Indemnity in Third-Party
Proceedings . A Third-Party Proceeding is a
Proceeding other than a Proceeding by or in the right of the
Company to procure a judgment in its favor. The Company shall
indemnify Director in accordance with the provisions of this
Section 3 if Director is, or is threatened to be made, a party to,
a witness in or otherwise participates in any Third-Party
Proceeding. Pursuant to this Section 3, Director shall be
indemnified against all Expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by Director or on
his behalf in connection with such Third-Party Proceeding or any
claim, issue or matter therein, if Director acted in good faith and
in a manner Director reasonably believed to be in or not opposed to
the best interests of the Company and, in the case of a criminal
proceeding had no reasonable cause to believe that such conduct was
unlawful.
4. Indemnity in Proceedings by or in the
Right of the Company . The Company shall
indemnify Director in accordance with the provisions of this
Section 4 if Director is, or is threatened to be made, a party to,
a witness in or otherwise participates in any Proceeding by or in
the right of the Company to procure a judgment in its favor.
Pursuant to this Section 4, Director shall be indemnified against
all Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding or any claim, issue or
matter therein and to the extent permitted by law, amounts paid in
settlement, if Director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Company. No indemnification for Expenses shall be made under
this Section 4 in respect of any claim, issue or matter as to which
Director shall have been finally adjudged by a court to be liable
to the Company, unless and only to the extent that the Delaware
Court of Chancery or any court in which the Proceeding was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case,
Director is fairly and reasonably entitled to indemnification.
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5. Indemnification for Expenses of a
Party Who is Wholly or Partly Successful .
(a) In
any Proceeding referred to in Section 4, if Director is not wholly
successful in such Proceeding, but has been adjudged to be liable
to the Company as to one or more but less than all claims, issues
or matters in such Proceeding, no indemnification shall be made in
respect of any claim, issue or matter as to which Director shall
have been adjudged to be liable to the Company, unless and only to
the extent that the Delaware Court of Chancery or any court in
which the Proceeding was brought shall determine upon application
that, despite the adjudication of liability to the Company, in view
of all the circumstances of the case, Director is fairly and
reasonably entitled to such indemnification. However, in
any Proceeding referred to in Section 4, the Company shall
indemnify Director against all Expenses actually and reasonably
incurred by him or on his behalf and, to the extent permitted by
law, amounts paid in settlement, in connection with each claim,
issue or matter as to which Director is successful on the merits or
has reached a settlement.
(b) To
the extent that Director has been successful on the merits or
otherwise in defense of any Proceeding (including any Proceeding
referred to in Section 4), or in defense of any claim, issue or
matter therein, Director shall be indemnified and held harmless by
the Company to the fullest extent authorized by the DGCL, as the
same exists or may hereafter be amended, against all Expenses
actually and reasonably incurred or suffered by Director or on
Director’s behalf in connection
therewith. Indemnification pursuant to this Section 5(b)
shall not require a determination pursuant to Section 10 of this
Agreement.
(c) For
purposes of this Section 5 and without limitation, the termination
of any claim, issue or matter in a Proceeding in which Director is
a defendant by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or
matter.
6. Additional Indemnification
.
(a) Notwithstanding
any limitation in Sections 3, 4, or 5, the Company shall indemnify
Director to the extent permitted by law if Director is a party to
or threatened to be made a party to, a witness in or otherwise
participates in any Proceeding against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably
incurred by Director in connection with the Proceeding (1) unless
Director’s conduct constitutes a breach of Director’s
duty of loyalty to the Company or its stockholders , (2)
except for liability for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(3) except for liability under Section 174 of the DGCL, or (4)
except for liability relating to any transaction from which the
Director derived an improper benefit.
(b) For
purposes of Section 6(a), the meaning of the phrase "to the extent
permitted by law" shall mean:
(i) &
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