Exhibit 10.11
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT dated
as of
, is between Arthur J. Gallagher & Co. (the
“Company”) and
(“Indemnitee”).
WHEREAS, the Board of Directors has
determined that the inability to attract and retain qualified
persons as directors and officers is detrimental to the best
interests of the Company’s stockholders and that the Company
should act to assure such persons that there will be adequate
certainty of protection through insurance and indemnification
against risks of claims and actions against them arising out of
their service to and activities on behalf of the Company;
and
WHEREAS, the Company has adopted
provisions in its Amended and Restated By-laws providing for
indemnification and advancement of expenses of its directors and
officers to the fullest extent permitted by applicable law, and the
Company wishes to clarify and enhance the rights and obligations of
the Company and Indemnitee with respect to indemnification and
advancement of expenses; and
WHEREAS, in order to induce and
encourage highly experienced and capable persons such as Indemnitee
to serve and continue to serve as directors and officers of the
Company and in any other capacity with respect to the Company, and
to otherwise promote the desirable end that such persons will
resist what they consider unjustified lawsuits and claims made
against them in connection with the good faith performance of their
duties, with the knowledge that certain expenses, costs, judgments,
penalties, fines and liabilities incurred by them in their defense
of such litigation are to be borne by the Company and they shall
receive the maximum protection against such risks and liabilities
as may be afforded by law, the Board of Directors of the Company
has determined that the following Agreement is reasonable and
prudent to promote and ensure the best interests of the Company and
its stockholders; and
WHEREAS, the Company desires to have
Indemnitee continue to serve as a director or officer of the
Company and in such other capacity with respect to the Company as
the Company may request, as the case may be, free from undue
concern for unpredictable, inappropriate or unreasonable legal
risks and personal liabilities by reason of Indemnitee acting in
good faith in the performance of Indemnitee’s duties; and
Indemnitee desires to continue so to serve, provided, and on the
express condition, that he or she is furnished with the indemnity
set forth hereinafter;
Now, therefore, in consideration of
Indemnitee’s continued service as a director or officer of
the Company, the parties hereto agree as follows:
1. Service by Indemnitee .
Indemnitee shall serve and/or continue to serve as a director or
officer of the Company faithfully and to the best of
Indemnitee’s ability so long as Indemnitee is duly elected or
appointed and until such time as Indemnitee is removed as permitted
by law or tenders a resignation in writing.
2. Indemnification and
Advancement of Expenses . The Company shall indemnify
Indemnitee, and shall pay to Indemnitee in advance of the final
disposition of any Proceeding all Expenses incurred by Indemnitee,
to the fullest extent permitted by applicable law in effect on the
date of this Agreement or as such law may from time to time be
amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Company to provide broader rights
than said law permitted the Company to provide prior to such
amendment). Without diminishing the scope of the rights provided by
this Section, the rights of Indemnitee to indemnification and
advancement of Expenses provided hereunder shall include but shall
not be limited to those rights hereinafter set forth, except that
no indemnification or advancement of Expenses shall be paid to
Indemnitee:
(a) to the extent expressly
prohibited by applicable law or the Amended and Restated By-laws of
the Company;
(b) for which payment is actually
made to Indemnitee under a valid and collectible insurance policy
or under a valid and enforceable indemnity clause, provision of the
certificate of incorporation or by-laws, or agreement of the
Company or any other company or organization where Indemnitee is
serving at the request of the Company, except in respect of any
indemnity exceeding the payment under such insurance, indemnity
clause, provision of the certificate of incorporation or by-laws,
or agreement; or
(c) in connection with an action,
suit or proceeding (or part thereof) (including claims and
counterclaims) initiated by Indemnitee, except a judicial
proceeding or arbitration pursuant to Section 10 to enforce
rights under this Agreement, unless the action, suit or proceeding
(or part thereof) was authorized or ratified by the Board of
Directors of the Company.
3. Action or Proceedings Other
than an Action by or in the Right of the Company . Except as
limited by Section 2 above, Indemnitee shall be entitled to
the indemnification rights provided in this Section if Indemnitee
was or is a party or is threatened to be made a party to any
Proceeding (other than an action by or in the right of the Company)
by reason of the fact that Indemnitee is or was a director,
officer, employee, agent or fiduciary of the Company, or while a
director, officer, employee, agent or fiduciary of the Company is
or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise; or by reason
of anything done or not done by Indemnitee in any such capacity.
Pursuant to this Section, Indemnitee shall be indemnified against
all Expenses, costs, judgments, penalties, fines, liabilities and
amounts
2
paid in settlement by or on behalf of Indemnitee
actually and reasonably incurred by Indemnitee in connection with
such Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to any criminal
Proceeding, had no reasonable cause to believe his or her conduct
was unlawful.
4. Indemnity in Proceedings by or
in the Right of the Company . Except as limited by
Section 2 above, Indemnitee shall be entitled to the
indemnification rights provided in this Section if Indemnitee was
or is a party or is threatened to be made a party to any Proceeding
brought by or in the right of the Company to procure a judgment in
its favor by reason of the fact that Indemnitee is or was a
director, officer, employee, agent or fiduciary of the Company, or
while a director, officer, employee, agent or fiduciary of the
Company is or was serving at the request of the Company as a
director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise;
or by reason of anything done or not done by Indemnitee in any such
capacity. Pursuant to this Section, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of such Proceeding if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company, except that no such indemnification shall be made
in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Company unless and
only to the extent that the Court of Chancery of Delaware or the
court in which such 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 indemnity for such Expenses which such Court
of Chancery or such other court shall deem proper.
5. Indemnification for Expenses
of Successful Party . Notwithstanding the limitations of
Section 3 and 4 above, to the extent that Indemnitee is
successful on the merits or otherwise, in whole or in part, in
defense of any Proceeding or in defense of any claim, issue or
matter therein, including, without limitation, the dismissal of any
action without prejudice, or if it is ultimately determined, after
all appeals by a court of competent jurisdiction, that Indemnitee
is otherwise entitled to be indemnified against Expenses,
Indemnitee shall be indemnified against Expenses actually and
reasonably incurred by Indemnitee in connection
therewith.
6. Partial Indemnification .
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the
Expenses, costs, judgments, penalties, fines, liabilities or
amounts paid in settlement by or on behalf of Indemnitee actually
and reasonably incurred in connection with any Proceeding, or in
connection with any judicial proceeding or arbitration pursuant to
Section 10 to enforce rights under this Agreement, but not,
however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion of such Expenses,
costs, judgments, penalties, fines, liabilities and amounts paid in
settlement by or on behalf of Indemnitee actually and reasonably
incurred to which Indemnitee is entitled.
3
7. Indemnification for Expenses
of a Witness . Notwithstanding any other provision of this
Agreement, to the maximum extent permitted by applicable law,
Indemnitee shall be entitled to indemnification against all
Expenses actually and reasonably incurred or suffered by Indemnitee
or on Indemnitee’s behalf if Indemnitee appears as a witness
or otherwise incurs legal expenses as a result of or related to
Indemnitee’s service as a director or officer of the Company,
in any threatened, pending or completed action, suit or proceeding,
whether of a civil, criminal, administrative, investigative,
legislative or other nature, to which Indemnitee neither is, nor is
threatened to be made, a party.
8. Determination of Entitlement
to Indemnification . To receive indemnification under this
Agreement, Indemnitee shall submit a written request to the
Secretary of the Company. Such request shall include documentation
or information which is necessary to determine whether
indemnification is payable under this Agreement and which is
reasonably available to Indemnitee. Upon receipt by the Company of
a written request by Indemnitee for indemnification pursuant to
Sections 3, 4, 5, 6 or 7 the entitlement of
Indemnitee to indemnification, to the extent not provided pursuant
to the terms of this Agreement, shall be determined based upon the
facts known at the time by the following person or persons who
shall be empowered to make such determination: (a) the Board
of Directors of the Company by a majority vote of Disinterested
Directors, whether or not such majority constitutes a quorum;
(b) a committee of Disinterested Directors designated by a
majority vote of such directors, whether or not such majority
constitutes a quorum; (c) if there are no Disinterested
Directors, or if the Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee; (d) the
stockholders of the Company; or (e) in the event that a Change
in Control has occurred, by Independent Counsel in a written
opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee. Such Independent Counsel shall be selected
by the Board of Directors and approved by Indemnitee, except that
in the event that a Change in Control has occurred, Independent
Counsel shall be selected by Indemnitee. Upon failure of the Board
so to select such Independent Counsel or upon failure of Indemnitee
so to approve (or so to select, in the event that a Change in
Control has occurred), such Independent Counsel shall be selected
upon application to a court of competent jurisdiction. The
determination of entitlement to indemnification shall be made and,
unless a contrary determination is made, such indemnification shall
be paid not later than 60 calendar days after receipt by the
Company of a written request for indemnification. Any amounts
incurred by Indemnitee in connection with a request for
indemnification or advancement of Expenses hereunder, under any
other agreement, any provision of the Company’s Amended and
Restated By-laws or any directors’ and officers’
liability insurance, shall be borne by the Company. The Company
hereby indemnifies Indemnitee for any such amounts and agrees to
hold Indemnitee harmless therefrom irrespective of the outcome of
the determination of Indemnitee’s entitlement to
indemnification. If the person making such determination shall
determine that Indemnitee is entitled to indemnification as to part
(but not all) of the applicati
