INDEMNIFICATION
AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (this “ Agreement
”) is made and entered into this
day of
,
, by and between
(the “ Indemnitee ”) and Dycom
Industries, Inc., a Florida corporation (the “
Corporation ”).
WHEREAS ,
the Board of Directors of the Corporation (the “ Board
of Directors ”) has reviewed and analyzed the
protection from liability available to directors or officers of the
Corporation (hereinafter, “ Directors ”
or “ Officers ”) and its subsidiaries
under the Corporation’s existing corporate documents and
applicable law; and
WHEREAS ,
increases in corporate litigation subjects Directors and Officers
to expensive litigation risks at the same time that the
availability of directors’ and officers’ liability
insurance has been limited; and
WHEREAS ,
the Board of Directors has determined that the protection offered
by the Corporation’s existing corporate documents, applicable
law, and liability insurance is not sufficient to fully protect its
Directors or Officers from liability; and
WHEREAS ,
it is essential to the Corporation to attract and retain the most
capable persons available as Directors and/or Officers;
and
WHEREAS ,
the Board of Directors has determined that highly competent persons
will be difficult to attract and retain as Directors and/or
Officers unless they are adequately protected against liabilities
incurred in performance of their duties in such capacity;
and
WHEREAS ,
the Board of Directors has determined that the use of
indemnification agreements will allow the Corporation to offer
additional appropriate protection from liability to its Directors
or Officers; and
WHEREAS ,
the Indemnitee is a Director and/or Officer; and
WHEREAS,
the indemnification and advancement provisions of
Section 607.0850 of the Florida Business Corporation Act (the
“ FBCA ”) and Article XIV of the
bylaws of the Corporation (the “ Bylaws
”) expressly provide that they are non-exclusive;
and
NOW
THEREFORE, in consideration of the Indemnitee’s services
to the Corporation, the mutual agreements and covenants contained
herein, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
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Section 1.
Definitions . For purposes of this Agreement:
(a) “
Change in Control ” shall mean, and a Change in
Control shall be deemed to have occurred if, on or after the date
of this Agreement, (i) any “person” (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act), other
than (A) a trustee or other fiduciary holding securities under
an employee benefit plan of one or more of the Corporation or any
of its subsidiaries, as the case may be, acting in such capacity or
(B) a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation, becomes
the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Corporation representing more than thirty-three percent (33%)
of the total voting power represented by the Corporation’s
then outstanding Voting Securities (as defined below),
(ii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors and any new director whose election by the Board
of Directors or nomination for election by the Corporation’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 a majority thereof, (iii) the stockholders of the
Corporation approve a merger or consolidation of the Corporation
with any other corporation other than a merger or consolidation
that would result in the Voting Securities of the Corporation
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least a majority of the
total voting power represented by the Voting Securities of the
Corporation or such surviving entity outstanding immediately after
such merger or consolidation, (iv) the stockholders of the
Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the
Corporation of (in one transaction or a series of related
transactions) all or substantially all of the Corporation’s
assets, or (v) the Corporation shall file or have filed
against it, and such filing shall not be dismissed, any bankruptcy,
insolvency or dissolution proceedings, or a trustee, administrator
or creditors committee shall be appointed to manage or supervise
the affairs of the Corporation.
(b) “
Corporate Status ” shall mean the status of a
person who is serving or has served (i) as a director or
officer of the Corporation, (ii) in any capacity with respect
to any employee benefit plan of the Corporation, or (iii) as a
director, partner, trustee, officer, employee or agent of any other
Entity at the request of the Corporation. For purposes of this
Agreement, an officer or director of the Corporation who is serving
or has served as a director, partner, trustee, officer, employee or
agent of a Subsidiary shall be deemed to be serving at the request
of the Corporation.
(c) “
Disinterested Director ” shall mean a director
of the Corporation who is not and was not a party to the Proceeding
in respect of which indemnification is sought by
Indemnitee.
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(d) “
Effective Date ” shall mean the date first
listed above.
(e) “
Entity ” shall mean any corporation,
partnership, limited liability company, joint venture, foundation,
association, organization or other legal entity.
(f) “
Exchange Act ” shall mean the Securities
Exchange Act of 1934, as amended, and such regulations and guidance
promulgated thereunder.
(g) “
Expenses ” shall mean all fees, costs and
expenses incurred in connection with any Proceeding, including,
without limitation, attorneys’ fees, disbursements and
retainers, fees and disbursements of expert witnesses, private
investigators and professional advisors (including, without
limitation, accountants and investment bankers), court costs,
transcript costs, fees of experts, travel expenses, duplicating,
printing and binding costs, telephone and fax transmission charges,
postage, delivery services, secretarial services, and other
disbursements and expenses.
(h) “
Independent Counsel ” shall mean a law firm, or
a member of a law firm, that is experienced in matters of corporate
law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Corporation or Indemnitee 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 Corporation or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(i) “
Liabilities ” shall mean judgments, damages,
liabilities, losses, penalties, excise taxes, fines and amounts
paid in settlement.
(j) “
Proceeding ” shall mean any threatened, pending
or completed action, suit, arbitration, alternative dispute
resolution mechanism, investigation, administrative hearing or any
other proceeding, whether civil, criminal, administrative or
investigative, formal or informal, including appeals, except one
initiated by an Indemnitee pursuant to Section 10 or Section
13(b) of this Agreement to enforce his rights under this
Agreement.
(k) “
Subsidiary ” shall mean any Entity of which the
Corporation owns (either directly or through or together with
another Subsidiary of the Corporation) either (i) a general
partnership, managing membership or other similar interest or
(ii) fifty percent (50%) or more of the (A) voting power
of the voting capital equity interests of such Entity, or
(B) outstanding voting capital stock or other voting equity
interests of such Entity.
(l) “
Voting Securities ” shall mean securities of
the Corporation that entitle the holder to vote for the election of
Directors.
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Section 2.
Services by Indemnitee . In consideration of the
Corporation’s covenants and commitments hereunder, Indemnitee
agrees to continue to serve as a Director or Officer. However, this
Agreement shall not impose any obligation on Indemnitee or the
Corporation to continue Indemnitee’s service to the
Corporation beyond any period otherwise required by law or by other
agreements or commitments of the parties, if any.
Section 3.
Agreement to Indemnify . The Corporation agrees to indemnify
Indemnitee as follows:
(a) Subject
to the exceptions contained in Section 4 below, 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
Corporation) by reason of Indemnitee’s Corporate Status,
either prior to or after the execution of this Agreement,
Indemnitee shall be indemnified by the Corporation against all
Expenses and Liabilities incurred or paid by Indemnitee in
connection with such Proceeding (referred to herein as “
Indemnifiable Expenses ” and “
Indemnifiable Liabilities ,” respectively, and
collectively as “ Indemnifiable Amounts
”) if (i) Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in, or not opposed to, the
best interests of the Corporation, and (ii) with respect to any
criminal Proceeding, Indemnitee had no reasonable cause to believe
that Indemnitee’s conduct was unlawful. In addition, the
Corporation shall indemnify and hold harmless the Indemnitee from
and against any and all federal, state, local or foreign taxes (if
any) imposed on the Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement.
(b) Subject
to the exceptions contained in Section 4 below, if Indemnitee
was or is a party or is threatened to be made a party to any
Proceeding by or in the right of the Corporation to procure a
judgment in its favor by reason of Indemnitee’s Corporate
Status, either prior to or after the execution of this Agreement,
Indemnitee shall be indemnified by the Corporation against all
Indemnifiable Expenses and amounts paid in settlement 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 Corporation,
except that no indemnification shall be made under this subsection
in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged by a court of competent jurisdiction that
Indemnitee is liable to the Corporation, unless, and only to the
extent that, the court in which such Proceeding was brought or
another court of competent jurisdiction determines upon application
that in view of all the circumstances of the case, that Indemnitee
is fairly and reasonably entitled to indemnity for such
Indemnifiable Expenses and amounts paid in settlement, then
Indemnitee shall be entitled to payment in such amount as such
court deems proper. In addition, the Corporation shall indemnify
and hold harmless the Indemnitee from and against any and all
federal, state, local or foreign taxes (if any) imposed on the
Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement.
(c) Except
as otherwise prohibited under applicable law, the Proceedings
described in Sections 3(a) and 3(b) hereof shall include, for
purposes of this Agreement, any Proceedings that involve, directly
or indirectly, activities of the Indemnitee both in his or her
official capacities as a Director or Officer and actions taken in
another capacity while serving as Director or Officer on behalf of
the Corporation.
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(d) Notwithstanding
the exceptions listed in Section 4 below, to the extent that
Indemnitee has been successful on the merits or otherwise in
defense of any Proceeding referred to in subsections 3(a) or 3(b),
or in defense of any claim, issue, or matter therein, Indemnitee
shall be indemnified by the Corporation against Indemnifiable
Expenses actually and reasonably incurred by Indemnitee in
connection therewith.
(e) If
Indemnitee is entitled under any provisions of this Agreement to
indemnification by the Corporation for some or a portion of
Indemnifiable Amounts but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify Indemnitee
for the portion of such Indemnifiable Amounts to which Indemnitee
is entitled.
(f) For
purposes of this Section 3 only, the Indemnitee shall be
deemed to have acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Corporation, or, with respect to any criminal Proceeding, to
have had no reasonable cause to believe the Indemnitee’s
conduct was unlawful, if such action was based on a reasonable
reliance upon any of the following: (i) the records or books
of the Corporation or applicable Entity, including financial
statements; (ii) information supplied to the Indemnitee by the
officers of such Entity in the course of their duties;
(iii) the advice of legal counsel for the Corporation or the
applicable Entity; or (iv) information or records given in
reports made to the Corporation or the applicable Entity by its
independent certified public accountant or by an appraiser or other
expert selected with reasonable care by such entity. The provisions
of this Section 3(f) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which the Indemnitee
may be deemed to have met the applicable standard of conduct set
forth in this Section 3.
Section 4.
Exceptions to Indemnification . Indemnitee shall be entitled
to indemnification under Sections 3(a) and 3(b) above in all
circumstances unless it has been determined in accordance with
Section 7 that, in connection with the subject of the
Proceeding out of which the claim for indemnification has arisen, a
judgment or other final adjudication establishes that his or her
actions, or omissions to act, were material to the cause of action
so adjudicated and constitute:
(i)
a violation of criminal law, unless the Indemnitee had reasonable
cause to believe his or her conduct was lawful or had no reasonable
cause to believe his or her conduct was unlawful;
(ii)
a transaction from which Indemnitee derived an improper personal
benefit;
(iii)
in the event the Indemnitee is a Director, a circumstance under
which the liability provisions of Section 607.0834 of the FBCA
are applicable; or
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(iv)
willful misconduct or a conscious disregard for the best interests
of the Corporation, in each case, in a Proceeding by or in the
right of the Corporation to procure a judgment in its favor or in a
Proceeding by or in the right of a stockholder.
Section 5.
Advancement of Expenses . The Corporation shall advance all
Indemnifiable Expenses within thirty (30) days after the
receipt by the Corporation of a written request from Indemnitee for
such advancement and on a current basis thereafter, whether prior
to or after final disposition of the underlying Proceeding. Such
written request shall be accompanied by evidence of the
Indemnifiable Expenses incurred by Indemnitee and shall include a
written undertaking by or on behalf of Indemnitee to repay any and
all amounts advanced if it shall ultimately be determined that
Indemnitee is not entitled to indemnification by the Corporation
under this Agreement. Indemnitee’s repayment undertaking
shall be unsecured and interest-free. However, advancement of
Indemnifiable Expenses shall not be made to Indemnitee if a
judgment or other final adjudication establishes that his or her
actions, or omissions to act, were material to the cause of action
so adjudicated and constitute:
(a) A
violation of criminal law, unless the Indemnitee had reasonable
cause to believe his or her conduct was lawful or had no reasonable
cause to believe his or her conduct was unlawful;
(b) A
transaction from which Indemnitee derived an improper personal
benefit;
(c) In
the event the Indemnitee is a Director, a circumstance under which
the liability provisions of Section 607.0834 of the FBCA are
applicable; or
(d) Willful
misconduct or a conscious disregard for the best interests of the
Corporation in a Proceeding by or in the right of the Corporation
to procure a judgment in its favor or in a Proceeding by or in the
right of a stockholder.
Section 6.
Defense of the Underlying Proceeding .
(a)
Notice by Indemnitee . Upon being served with any summons,
citation, subpoena, complaint, indictment, information, or other
document relating to any Proceeding which may result in the payment
of Indemnifiable Amounts or the advancement of Indemnifiable
Expenses hereunder, Indemnitee shall notify the Corporation
promptly, but in all events no later than the earlier of
(i) fourteen (14) days after actual receipt, or
(ii) as soon as necessary after actual receipt to prevent the
Corporation from being materially and adversely prejudiced by late
notice; provided, however, that the failure to provide such notice
shall not release the Corporation from any of its obligations under
this Agreement except to the extent that the Corporation is
materially prejudiced by such failure.
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(b)
Option to Control Defense . Subject to the provisions of
Section 6(c), in the event the Corporation is obligated to
advance Indemnifiable Expenses under Section 5, the
Corporation shall have the right to participate in any Proceeding
and, at its option, assume the defense of any Proceeding with
counsel approved by Indemnitee (which approval shall not be
unreasonably withheld or delayed), upon the delivery to Indemnitee
of written notice of its election to do so. However, the Indemnitee
shall have the right to effectively participate in the defense
and/or settlement of such Proceeding, including receiving copies of
all correspondence and participating in all meetings and
teleconferences concerning the Proceeding. In no event shall the
Corporation consent to the entry of any judgment against Indemnitee
or enter into any settlement or compromise without the prior
written consent of the Indemnitee, (which consent shall not be
unreasonably withheld or delayed).
(c)
Limitation of Obligation to Reimburse Defense Expenses . In
the event the Corporation assumes the defense of any Proceeding
pursuant to Section 6(b), the Corporation will not be liable
to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same
Proceeding; provided that (i) the Corporation shall indemnify
Indemnitee for reasonable costs and expenses of counsel for
Indemnitee to monitor the Proceeding (provided, however, that such
counsel for Indemnitee will not appear as counsel of record in any
such Proceeding) and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the
Corporation, (B) Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Corporation
and Indemnitee in the conduct of any such defense, or (C) the
Corporation shall not continue to retain the approved counsel to
defend such Proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the
Corporation. Except as otherwise provided by Section 6(d) below,
the Corporation’s obligation to indemnify Indemnitee with
respect to legal fees shall be limited to the fees charged by
counsel selected by Indemnitee and all other persons similarly
entitled to indemnification by the Corporation in the same
Proceeding on account of their Corporate Status to defend the
interests of all such persons entitled to
indemnification.
(d)
Indemnitee’s Right to Individual Counsel .
Notwithstanding the provisions of Section 6(c) above, if in a
Proceeding to which Indemnitee is a party by reason of
Indemnitee’s Corporate Status, Indemnitee reasonably
concludes that it may have separate defenses or counterclaims to
assert with respect to any issue which may not be consistent with
the position of other defendants in such Proceeding, Indemnitee
shall be entitled to be represented by separate legal counsel of
Indemnitee’s choice at the expense of the Corporation. In
addition, if the Corporation fails to comply with any of its
obligations under this Agreement or in the event that the
Corporation or any other person takes any action to declare all or
any part of this Agreement void or unenforceable, or institutes any
Proceeding to deny or to recover from Indemnitee the benefits
intended to be provided to Indemnitee hereunder, Indemnitee shall
have the right to retain counsel of Indemnitee’s choice, at
the expense of the Corporation, to represent Indemnitee in
connection with any such matter.
Section 7.
Procedure for Determination of Entitlement to
Indemnification .
(a) To
obtain indemnification under this Agreement, Indemnitee shall
submit to the Corporation a written request, including therein or
therewith 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 (a “ Determination ”).
The Secretary of the Corporation shall, promptly upon receipt of
such a request for indemnification, advise the Board of Directors
in writing that Indemnitee has requested indemnification. All
Expenses related to the making of a Determination shall be borne
solely by the Corporation.
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(b) Upon
written request by Indemnitee for indemnification pursuant to the
first sentence of Section 7(a) above, a Determination shall be made
(unless made by a court) in the specific case: (i) if a Change
in Control shall have occurred, by Independent Counsel (unless
Indemnitee shall request that such Determination be made by the
Board of Directors or the stockholders, in which case by the person
or persons or in the manner provided for in clauses (ii) or
(iii) of this Section 7(b)) in a written opinion to the
Board of Directors, a copy of which shall be delivered to
Indemnitee; (ii) if a Change in Control shall not have
occurred, (A) by the Board of Directors by a majority vote of
a quorum consisting of Disinterested Directors, or (B) if a
quorum of the Board of Directors consisting of Disinterested
Directors is not obtainable or, even if obtainable, by majority
vote of a committee duly designated by the Board of Directors (in
which non-Disinterested Directors may participate) consisting
solely of two or more Disinterested Directors; or (C) by
Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee or (D) by the
stockholders of the Corporation by a majority vote of a quorum
consisting of stockholders who were not parties to such Proceeding
or, if no such quorum is obtainable, by a majority vote of
stockholders who were not parties to such Proceeding; or
(iii) as provided in Section 8(b) of this Agreement. If it is
so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after
such Determination an
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