Exhibit 10.2
INDEMNIFICATION AGREEMENT
Indemnification Agreement
(“Agreement”) is dated as of
, 2005 between AnnTaylor Stores Corporation, a Delaware corporation
(the “Company”), and
(“Indemnitee”).
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 and/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 Delaware General
Corporation Law (“DGCL”), expressly provides that the
indemnification provisions set forth therein are not exclusive, and
thereby contemplates that contracts may be entered into between the
Company and members of the board of directors, officers and others
with respect to indemnification.
WHEREAS, it is reasonable, prudent
and necessary for the Company to contractually obligate itself to
indemnify, and to advance expenses on behalf of, such persons 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, Indemnitee may not be
willing to serve as a director without the additional protection
provided for under this/her Agreement, and the Company desires
Indemnitee to serve in such capacity and Indemnitee is willing to
serve and continue to serve on the condition that he/she be so
indemnified;
NOW, THEREFORE, the Company and
Indemnitee do hereby agree as follows:
1. SERVICES TO THE COMPANY .
Indemnitee will serve, or continue to serve, at the will of the
Company in accordance with the Company’s Bylaws, as a
director of the Company for so long as Indemnitee is duly elected
or appointed or until Indemnitee tenders his/her
resignation.
2. DEFINITIONS . As used in
this/her Agreement:
(a) “ Action ”
means any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the Company
or otherwise, and whether of a civil, criminal, administrative or
investigative nature.
(b) “ Board ”
means the Board of Directors of the Company.
(c) A “ Change in
Control ” shall be deemed to occur upon the earliest to
occur after the date of this/her Agreement of any of the following
events:
(i) any “person,” as
such term is used in Section 13(d) and 14(d) of the Exchange Act,
other than (1) the Company, (2) any trustee or other fiduciary
holding securities under an employee benefits plan of the Company,
or (3) any corporation owned, directly or indirectly, by the
stockholders of the Company (in substantially the same proportion
as their ownership of shares) (a “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 20% or more of the combined
voting power of the Company’s then outstanding voting
securities;
(ii) during any period of not more
than two consecutive years, individuals who at the beginning of
such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (i),
(iii) or (iv) of this/her Section 2(c)) whose election by the Board
or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least
a majority thereof;
(iii) there is consummated a merger
or consolidation of the Company with any other entity, other than a
merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving or parent entity) more than
80% of the combined voting power of the voting securities of the
Company or such surviving or parent entity outstanding immediately
after such merger or consolidation; or
(iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or there is
consummated the sale or disposition of all or substantially all of
the assets of the Company and its subsidiaries taken as a whole (or
any transaction having a similar effect).
(d) “ Corporate Status
” describes a person who is or was serving as a director or
agent of the Company or, at the request of the Company, as a
director, officer, employee or agent of any other Enterprise.
References to “ serving at the request of the Company
” shall include, without limitation, 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.
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(e) “ Disinterested
Director ” means a director of the Company who is not and
was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(f) “ Exchange Act
” means the Securities Exchange Act of 1934, as
amended.
(g) “ Enterprise
” means the Company and any other corporation, limited
liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise.
(h) “ Expenses ”
means all 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 participating in, a Proceeding, including
(without limitation) attorneys’ fees and expenses, retainers,
court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, and delivery service fees. Expenses
also include disbursements and 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.
(i) Reference to “
fines ” shall include any excise tax assessed with
respect to any employee benefit plan.
(j) A person who acted in good faith
and in a manner he/she 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
”.
(k) References “ to the
fullest extent permitted by applicable law ” shall
include, but not be limited to:
(i) to the fullest extent permitted
by the provisions of the DGCL that authorize or contemplate
additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL;
and
(ii) to the fullest extent
authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this/her Agreement that increase the
extent to which a corporation may indemnify its
directors.
(l) “ Proceeding
” means any Action in which Indemnitee was, is or will be
involved (as a party or otherwise) by reason of Indemnitee’s
Corporate Status, or any action taken by him/her or of any action
on his/her/her part while acting in his/her/her Corporate Status,
in each case whether or not serving in such capacity at the time
any liability or expense is incurred for which indemnification,
reimbursement, or advancement of expenses can be provided under
this/her Agreement.
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(m) “ Independent
Counsel ” means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither is,
nor in the past five years has been, retained to represent: (i) the
Company or Indemnitee in any matter material to either such party
(other than with respect to matters concerning the Indemnitee under
this/her Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.
“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 Indemnitee in an action to determine
Indemnitee’s rights under this/her Agreement. The Company
agrees to pay the reasonable fees and expenses of the Independent
Counsel and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or
relating to this/her Agreement or its engagement pursuant
hereto.
3. THIRD-PARTY PROCEEDINGS .
If Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor against
Indemnitee, the Company shall indemnify Indemnitee to the fullest
extent permitted by applicable law against all Expenses, judgments,
fines and amounts paid in settlement directly or indirectly
incurred by or behalf of Indemnitee in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee
acted in good faith and in a manner he/she 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 his/her/her conduct was unlawful.
4. PROCEEDINGS BY OR IN THE RIGHT
OF THE COMPANY . If Indemnitee is, or is threatened to be made,
a party to or a participant in any Proceeding by or in the right of
the Company to procure a judgment in its favor, the Company shall
indemnify Indemnitee to the fullest extent permitted by applicable
law against all Expenses directly or indirectly incurred by or on
behalf of Indemnitee in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith
and in a manner he/she reasonably believed to be in or not opposed
to the best interests of the Company. No indemnification for
Expenses shall be made under this/her Section 4 in respect of any
claim, issue or matter as to which Indemnitee shall have been
finally adjudged by a court to be liable to the Company unless 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, Indemnitee is fairly and reasonably entitled to
indemnification.
5. PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL .
(a) Notwithstanding any other
provisions of this/her Agreement, to the fullest extent permitted
by applicable law:
(i) to the extent that Indemnitee is
a party to (or a participant in) and is successful, on the merits
or otherwise, in any Proceeding or in defense of any claim, issue
or matter therein, in whole or in part, the Company shall indemnify
Indemnitee against all Expenses directly or indirectly incurred by
or on behalf of Indemnitee in connection therewith; or
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(ii) if Indemnitee 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 directly or indirectly
incurred by or on behalf of Indemnitee in connection with (x) each
successfully resolved claim, issue or matter and (y) each claim,
issue, or matter related to any claim, issue or matter on which the
Indemnitee was successful.
(b) For purposes of this/her Section
and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
6. INDEMNIFICATION FOR EXPENSES
OF A WITNESS . Notwithstanding any other provision of this/her
Agreement, to the fullest extent permitted by applicable law, the
Company shall indemnify Indemnitee against all Expenses directly or
indirectly incurred by or on behalf of Indemnitee if, by reason of
his/her/her Corporate Status, Indemnitee is a witness in any Action
to which Indemnitee is not a party.
7. ADDITIONAL INDEMNIFICATION
. Notwithstanding any limitation in Sections 3, 4, or 5, the
Company shall indemnify Indemnitee to the fullest extent permitted
by applicable law if Indemnitee is a party to or threatened to be
made a party to any Proceeding (including a Proceeding by or in the
right of the Company to procure a judgment in its favor) against
all Expenses, judgments, fines and amounts paid in settlement in
connection with the Proceeding; provided, that the Company shall
have the right to consent to any settlement, which consent shall
not be unreasonably withheld.
8. EXCLUSIONS . The Company
shall not be obligated under this/her Agreement to provide any
indemnification in connection with any claim made against
Indemnitee:
(a) For an accounting of profits
made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act, or similar provisions of other
federal or state statutory law or common law; or
(b) In connection with any
Proceeding (or any part of any Proceeding) initiated by Indemnitee,
unless (i) such indemnification is expressly required to be made by
applicable law; (ii) the Board authorized the Proceeding (or any
part of any Proceeding) prior to its initiation; or (iii) the
Company provides the indemnification, in its sole discretion,
pursuant to the powers vested in the Company to the fullest extent
permitted by applicable law.
9. ADVANCEMENT OF EXPENSES .
Notwithstanding any provision of this/her Agreement, to the fullest
extent permitted by applicable law, the Company shall advance the
Expenses incurred by or on behalf of Indemnitee in connection with
any
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Proceeding within 20 days after the receipt by
the Company of a statement or statements requesting such advances
from time to time, whether prior to or after final disposition of
any Proceeding. Advances shall be unsecured and interest free, and
made without regard to Indemnitee’s ability to repay the
expenses or ultimate entitlement to indemnification under the other
provisions of this/her Agreement. Advances shall include all
reasonable Expenses incurred pursuing an Action to enforce this/her
right of advancement, including Expenses incurred preparing and
forwarding statements to the Company to support the advances
claimed. The Indemnitee shall qualify for advances solely upon the
execution and delivery to the Company of an undertaking to repay
the advance to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Company. This
Section 9 shall not apply to any claim made by Indemnitee for which
indemnification is excluded pursuant to Section 8.
10. PROCEDURE FOR NOTIFICATION
AND DEFENSE OF CLAIM .
(a) Within 30 days after service of
process of Indemnitee relating to notice of the commencement of any
Proceeding, Indemnitee shall submit to the Company a written
request, including such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to
determine whether and to what extent Indemnitee is entitled to
indemnification. The failure to notify the Company within such
period will not relieve the Company from any liability that it may
have to Indemnitee (i) under this/her Agreement except to the
extent the failure adversely affects the Company’s rights,
legal position, ability to defend or ability to obtain insurance
coverage with respect to such Proceeding or (ii) otherwise than
under this/her Agreement. The Secretary of the Company shall advise
the Board in writing promptly upon receipt of such a request for
indemnification.
(b) If the Company shall be
obligated to pay the Expenses in connection with any Proceeding
against the Indemnitee, the Company shall be entitled to assume and
control the defense of such Proceeding (with counsel consented to
by the Indemnitee, which consent shall not be unreasonably
withheld), upon the delivery to the Indemnitee of written notice of
its election so to do. After delivery of such notice, consent to
such counsel by the Indemnitee and the retention of such counsel by
the Company, the Company will not be liable to the Indemnitee under
this/her Agreement for any fees of separate counsel subsequently
incurred by the Indemnitee with respect to the same Proceeding,
provided that the reasonable fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company
if:
(i) the employment of separate
counsel by the Indemnitee has been previous
