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EXHIBIT 10.2
INDEMNIFICATION AGREEMENT
This
Indemnification Agreement ("AGREEMENT") is entered into as of
the
10th day of August by and between Whitehall
Jewellers, Inc., a Delaware
corporation (the "COMPANY"), and the
director of the Company identified on the
signature page hereto (the "DIRECTOR" or
"INDEMNITEE").
RECITALS
A. The
Company and the Director recognize the substantial increase in
corporate litigation in general, subjecting
directors, officers, employees,
controlling persons, fiduciaries and other
agents and affiliates to expensive
litigation risks at the same time as the
availability and coverage of liability
insurance has been severely limited.
B. The
current protection available to directors, officers, employees,
controlling persons, fiduciaries and other
agents and affiliates of the Company
may not be adequate under the present
circumstances, and directors, officers,
employees, controlling persons, fiduciaries
and other agents and affiliates of
the Company (or persons who may be alleged
or deemed to be the same), including
the Indemnitee, may not be willing to
continue to serve or be associated with
the Company in such capacities without
additional protection.
C. The
Company (i) desires to attract and retain the involvement of
highly
qualified persons, such as the Director, to
serve and be associated with the
Company, and (ii) accordingly, wishes to
provide for the indemnification and
advancement of expenses to the Director to
the maximum extent permitted by law.
NOW,
THEREFORE, the Company and the Director hereby agree as
follows:
1.
Indemnification.
(a)
Indemnification of Expenses. The Company shall indemnify and
hold harmless the Director to the fullest
extent permitted by law if he or she
was or 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, any
threatened, pending or completed action,
suit, proceeding or alternative dispute
resolution mechanism, or any hearing,
inquiry or investigation that Indemnitee
in good faith believes might lead to the
institution of any such action, suit,
proceeding or alternative dispute
resolution mechanism, whether civil, criminal,
administrative, investigative or other
(hereinafter a "CLAIM") by reason of (or
arising in part out of) any event or
occurrence related to the fact that
Indemnitee is or was (or is alleged to be
or to have been) a director, officer,
employee, controlling person, fiduciary or
other agent or affiliate of the
Company, or any subsidiary of the Company,
or is or was (or is alleged to be or
to have been) serving at the request of the
Company as a director, officer,
employee, controlling person, fiduciary or
other agent or affiliate of another
corporation, partnership, joint
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venture, trust or other enterprise, or by
reason of any action or inaction on
the part of Indemnitee while serving (or
allegedly serving) in such capacity
including, without limitation, any and all
losses, claims, damages, expenses and
liabilities, joint or several (including
any investigation, legal and other
expenses incurred in connection with, and
any amount paid in settlement of, any
action, suit proceeding or any claim
asserted) under the Securities Act, the
Exchange Act or other federal or state
statutory law or regulation, at common
law or otherwise, which relate directly or
indirectly to the registration,
purchase, sale or ownership of any
securities of the Company or to any fiduciary
obligation owed with respect to the Company
and its stockholders (hereinafter an
"INDEMNIFICATION EVENT"), against any and
all reasonable expenses (including
reasonable attorneys' fees and all other
reasonable costs, expenses and
obligations incurred in connection with
investigating, defending a witness in or
participating in (including on appeal), or
preparing to defend, be a witness in
or participate in, any such action, suit,
proceeding, alternative dispute
resolution mechanism, hearing, inquiry or
investigation), judgments, fines,
penalties and amounts paid in settlement
(if such settlement is approved in
advance by the Company, which approval
shall not be unreasonably withheld) of
such Claim and any federal, state, local or
foreign taxes imposed on Indemnitee
as a result of the actual or deemed receipt
of any payments under this Agreement
(collectively, hereinafter "EXPENSES"),
including all interest, assessments and
other charges paid or payable in connection
with or in respect of such Expenses.
Such payment of Expenses shall be made by
the Company as soon as practicable but
in any event no later than ten (10) days
after written demand by the Indemnitee
therefor is presented to the Company.
(b) Reviewing Party. Notwithstanding the foregoing, (i) the
obligations of the Company under Section
1(a) shall be subject to the condition
that the Reviewing Party (as defined in
Section 10(f) hereof) shall not have
determined (in a written opinion, in any
case in which the Independent Legal
Counsel referred to in Section 1(c) hereof
is involved) that Indemnitee would
not be permitted to be indemnified under
applicable law, and (ii) the obligation
of the Company to make an advance payment
of Expenses to Indemnitee pursuant to
Section 2(a) (an "EXPENSE ADVANCE") shall
be subject to the condition that, if,
when and to the extent that the Reviewing
Party determines that Indemnitee would
not be permitted to be so indemnified under
applicable law, the Company shall be
entitled to be reimbursed 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 Reviewing Party
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 until a
final judicial determination is made
with respect thereto. Indemnitee's
obligation to reimburse the Company for any
Expense Advance shall be unsecured and no
interest shall be charged thereon. If
there has not been a Change in Control (as
defined in Section 10(d) hereof), the
Reviewing Party shall be selected by the
Board of Directors with the approval of
the Indemnitee (which
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approval shall not be unreasonably
withheld), and if there has been such a
Change in Control (other than a Change in
Control (i) which has been approved by
a majority of the Company's Board of
Directors prior to such Change in Control
and (ii) following which a majority of the
Board of Directors of the Company is
comprised of directors who were directors
of the Company immediately prior to
the Change in Control), the Reviewing Party
shall be the Independent Legal
Counsel referred to in Section 10(e) hereof
subject to the approval of the
Indemnitee (which approval shall not be
unreasonably withheld). 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 seeking an
initial determination by the court or
challenging any such determination by the
Reviewing Party or any aspect thereof,
including the legal or factual bases
therefor, and the Company hereby consents
to service of process and to appear in any
such proceeding. Any determination by
the Reviewing Party otherwise shall be
conclusive and binding on the Company and
Indemnitee.
(c) Contribution. If the indemnification provided for in
Section
1(a) above for any reason is held by a
court of competent jurisdiction to be
unavailable to an Indemnitee in respect of
any losses, claims, damages, expenses
or liabilities referred to therein, then
the Company, in lieu of indemnifying
Indemnitee thereunder, shall contribute to
the amount paid or payable by
Indemnitee as a result of such losses,
claims, damages, expenses or liabilities
(i) in such proportion as is appropriate to
reflect the relative benefits
received by the Company and the Indemnitee,
or (ii) if the allocation provided
by clause (i) above is not permitted by
applicable law, in such proportion as is
appropriate to reflect not only the
relative benefits referred to in clause (i)
above but also the relative fault of the
Company and the Indemnitee in
connection with the action or inaction
which resulted in such losses, claims,
damages, expenses or liabilities, as well
as any other relevant equitable
considerations. In connection with the
registration of the Company's securities,
the relative benefits received by the
Company and Indemnitee shall be deemed to
be in the same respective proportions that
the net proceeds from the offering
(before deducting expenses) received by the
Company and the Indemnitee, in each
case as set forth in the table on the cover
page of the applicable prospectus,
bear to the aggregate public offering price
of the securities so offered. The
relative fault of the Company and
Indemnitee shall be determined by reference
to, among other things, whether the untrue
or alleged untrue statement of a
material fact or the omission or alleged
omission to state a material fact
relates to information supplied by the
Company or the Indemnitee and the
parties' relative intent, knowledge, access
to information and opportunity to
correct or prevent such statement or
omission.
The Company and Indemnitee agree that it would not be just and
equitable if contribution pursuant to this
Section 1(c) were determined by pro
rata or per capita allocation or by any
other method of allocation which does
not take account of the equitable
considerations referred to in the immediately
preceding paragraph. In connection with the
registration of the Company's
securities, in no event shall an Indemnitee
be required to contribute any amount
under this Section 1(c) in excess of the
lesser of (i) that proportion of the
total of such losses, claims, damages or
liabilities indemnified against equal
to the proportion of the total securities
sold under such registration statement
which is being sold by Indemnitee or (ii)
the net proceeds received by
Indemnitee from its sale of securities
under such registration statement. No
person found guilty of fraudulent
misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall
be entitled to contribution from any
person who was not found guilty of such
fraudulent misrepresentation.
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(d) Survival
Regardless of Investigation. The indemnification and
contribution provided for in this Section 1
will remain in full force and effect
regardless of any investigation made by or
on behalf of the Indemnitee.
(e) Change in Control. The Company agrees that if there is a
Change
in Control (as defined below) of the
Company (other than a Change in Control
which has been approved by a majority of
the Company's Board of Directors who
were directors immediately prior to such
Change in Control) then, with respect
to all matters thereafter arising
concerning the rights of Indemnitee to
payments of Expenses under this Agreement
or any other agreement or under the
Company's Certificate of Incorporation or
Bylaws as now or hereafter in effect,
Independent Legal Counsel (as defined in
Section 10(e) hereof) shall be selected
by the Indemnitee and approved by the
Company (which approval shall not be
unreasonably withheld). Such counsel, among
other things, shall render its
written opinion to the Company and
Indemnitee as to whether and to what extent
Indemnitee would be permitted to be
indemnified under applicable law. The
Company agrees to abide by such opinion and
to pay the reasonable fees of the
Independent Legal Counsel referred to above
and to fully indemnify such counsel
against any and all expenses (including
attorneys' fees), claims, liabilities
and damages arising out of or relating to
this Agreement or its engagement
pursuant hereto.
(f) Mandatory Payment of Expenses. Notwithstanding any other
provision of this Agreement other than
Section 9 hereof, to the extent that an
Indemnitee has been successful on the
merits or otherwise, including, without
limitation, the dismissal of an action
without prejudice, in the defense of any
action, suit, proceeding, inquiry or
investigation referred to in Section (1)(a)
hereof or in the defense of any claim,
issue or matter therein, Indemnitee shall
be indemnified against all Expenses
incurred by Indemnitee in connection
therewith.
2.
Expenses; Indemnification
Procedure.
(a) Advancement of Expenses. The Company shall advance all
Expenses
incurred by Indemnitee. The advances to be
made hereunder shall be paid by the
Company to the Indemnitee as soon as
practicable but in any event no later than
ten (10) days after written demand by
Indemnitee therefor to the Company.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to Indemnitee's right
to be indemnified under this
Agreement, give the Company notice in
writing as soon as practicable of any
Claim made against Indemnitee for which
indemnification will or could be sought
under this Agreement. In addition,
Indemnitee shall give the Company such
information and cooperation as it may
reasonably require and as shall be within
Indemnitee's power.
(c) No Presumptions; Burden of Proof. For purposes of this
Agreement, the termination of any Claim by
judgment, order, settlement (whether
with or without court approval) or
conviction, or upon a plea of nolo
contendere, or its equivalent, shall not
create a presumption that Indemnitee
did not meet any particular standard of
conduct or have any particular belief or
that a court has determined that
indemnification is not permitted by applicable
law. In addition, neither the failure of
the Reviewing Party to have made a
determination as to whether Indemnitee has
met any
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particular standard of conduct or had any
particular belief, nor an actual
determination by the Reviewing Party that
the Indemnitee has not met such
standard of conduct or did not have such
belief, prior to the commencement of
legal proceedings by Indemnitee to secure a
judicial determination that the
Indemnitee should be indemnified under
applicable law, shall be a defense to the
Indemnitee's claim or create a p
