Exhibit 10.3
PERRY ELLIS INTERNATIONAL,
INC.
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION
AGREEMENT (the
“Agreement”) is dated as of
,
by and between Perry Ellis International, Inc., a corporation
organized under the laws of the State of Florida (the
“Corporation”), and
(the “Indemnitee”).
W
I T N
E S S E T H
:
WHEREAS , the substantial increase in corporate
litigation subjects directors and officers of corporations and
others to expensive litigation risks at the same time that the
availability of competent and qualified directors, officers,
employees, consultants, advisers and agents has been greatly
reduced, and the coverage offered by directors’ and
officers’ liability insurance has been severely
limited;
WHEREAS , the Articles of Incorporation of the
Corporation (the “Articles of Incorporation”) requires
the Corporation to indemnify and advance expenses to its directors
and officers to the fullest extent permitted by law, and the
Indemnitee has been serving and continues to serve as a director or
officer of the Corporation in part in reliance on such Articles of
Incorporation;
WHEREAS, in recognition of the Indemnitee’s need
for substantial protection against personal liability in connection
with the Indemnitee’s continued service to the Corporation,
and to provide Indemnitee with specific contractual assurance that
the protection promised by the Articles of Incorporation will be
available to Indemnitee (regardless of, among other things, any
amendment to or revocation of such or any change in the composition
of the Corporation’s Board of Directors or acquisition
transaction relating to the Corporation), the Corporation wishes to
provide in this Agreement for the indemnification of, and the
advancing of expenses to, the Indemnitee to the fullest extent
permitted by law and as set forth in this Agreement, and, to the
extent insurance is maintained, for the continued coverage of the
Indemnitee under the Corporation’s directors’ and
officers’ liability insurance policies;
WHEREAS , as a condition to the Indemnitee’s
agreement to continue to serve as a director and/or officer of the
Corporation, the Indemnitee requires that the Indemnitee be
indemnified from liability to the fullest extent permitted by law;
and
WHEREAS , the Corporation is willing to indemnify the
Indemnitee to the fullest extent permitted by law in order to
retain the services of the Indemnitee.
NOW, THEREFORE,
for and in consideration of the
mutual promises and covenants contained herein, the Corporation and
the Indemnitee agree as follows:
Section 1. Mandatory
Indemnification In Proceedings Other Than Those By Or In The Right
Of The Corporation . Subject to Section 4 hereof, the
Corporation shall indemnify and hold harmless the Indemnitee from
and against any and all claims, damages, expenses (including
attorneys’ fees), judgments, penalties, fines (including
excise taxes assessed with respect to an employee benefit plan),
settlements, and all other liabilities incurred or paid by the
Indemnitee (collectively, “Losses”) in connection with
the investigation, defense, prosecution, settlement or appeal of
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Corporation) and to which
the Indemnitee was or is a party or is threatened to be made a
party by reason of the fact that the Indemnitee is or was an
officer, director, shareholder, employee, consultant, adviser or
agent of the Corporation, or is or was serving at the request of
the Corporation as an officer, director, partner, trustee,
employee, adviser or
agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise
(collectively, “Another Enterprise”), or by reason of
anything done or not done by the Indemnitee in any such capacity or
capacities, provided, however, that the Indemnitee 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, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe the Indemnitee’s conduct was
unlawful.
Section 2. Mandatory
Indemnification In Proceedings By Or In The Right Of The
Corporation . Subject to Section 4 hereof, the Corporation
shall indemnify and hold harmless the Indemnitee from and against
any and all expenses (including attorneys’ fees) and amounts
paid in settlement not exceeding, in the judgment of the Board of
Directors, the estimated expenses of litigating the proceeding to
conclusion, actually and reasonably incurred or paid by the
Indemnities in connection with the investigation, defense,
prosecution, settlement or appeal of any threatened, pending or
completed action, suit or proceeding by or in the right of the
Corporation to procure a judgment in its favor, whether civil,
criminal, administrative or investigative, and to which the
Indemnitee was or is a party or is threatened to be made a party by
reason of the fact that the Indemnitee is or was an officer,
director, shareholder, employee, consultant, adviser or agent of
the Corporation, or is or was serving at the request of the
Corporation as an officer, director, partner, trustee, employee,
adviser or agent of Another Enterprise, or by reason of anything
done or not done by the Indemnitee in any such capacity or
capacities, provided that (i) the Indemnitee 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 and (ii) no
indemnification shall be made under this Section 2 in respect of
any claim, issue or matter as to which the Indemnitee shall have
been adjudged to be liable unless, and only to the extent that, the
court in which such proceeding was brought (or any other court of
competent jurisdiction) shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem
proper.
Section 3. Mandatory
Indemnification Against Expenses Incurred While Testifying .
Subject to Section 4 hereof, the Corporation shall indemnify the
Indemnitee against expenses (including attorneys’ fees)
incurred or paid by the Indemnitee as a result of providing
testimony in any proceeding, whether civil, criminal,
administrative or investigative (including but not limited to any
action or suit by or in the right of the Corporation to procure
judgment in its favor), by reason of the fact that the Indemnitee
is or was an officer, director, shareholder, employee, consultant,
adviser or agent of the Corporation, or is or was serving at the
request of the Corporation as an officer, director, partner,
trustee, employee, adviser or agent of Another
Enterprise.
Section 4. Authorization of
Indemnification .
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4.1
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Authorization of Indemnification and
Reasonableness of Expenses . Any indemnification under Sections 1, 2 and 3
hereof (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination (the
“Determination”) that indemnification of the Indemnitee
is proper in the circumstances because the Indemnitee has met the
applicable requirements set forth in Section 1, 2 and 3 hereof, as
the case may be. Subject to Sections 5.5, 5.6 and 8 of this
Agreement, the Determination and the evaluation and finding as to
the reasonableness of expenses incurred by the Indemnitee shall be
shall be made in the following order of preference:
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(a)
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first, by the
Corporation’s Board of Directors (the “Board”) by
majority vote of a quorum consisting of directors
(“Disinterested Directors”) who are not named parties
to such action, suit or proceeding; or
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(b)
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next, if such a
quorum of Disinterested Directors cannot be obtained, by majority
vote of a committee duly designated by the Board (in which all
directors, whether or not Disinterested Directors, may participate)
consisting solely of two or more Disinterested Directors;
or
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(c)
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next, if such a
committee cannot be designated, by any independent legal counsel
(who may be any outside counsel regularly employed by the
Corporation) selected by the Board prescribed in (a) above or by
the committee of the Board prescribed in (b) above, in a written
opinion; or if a quorum of the Board cannot be obtained for (a)
above and the committee cannot be designated under (b) above,
selected by majority vote of the full Board (in which directors who
are parties may participate); or
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(d)
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next, if such
legal counsel determination cannot be obtained, by majority vote of
a quorum consisting of shareholders who are not parties to such
proceeding, or if no such quorum is obtainable, by a majority vote
of shareholders who are not parties to the proceeding.
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If the Determination is made by independent
legal counsel, the decision as to the reasonableness of expenses
shall also be made by independent legal counsel. All expenses shall
be considered reasonable for purposes of this Agreement if the
finding contemplated by this Section 4.1 is not made within the
prescribed time. The finding required by this Section 4.1 may be
made in advance of the payment (or incurring) of the expenses for
which indemnification or reimbursement is sought.
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4.2
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No
Presumptions . The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a
manner that the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect
to any criminal action or proceeding, had reasonable cause to
believe that the Indemnitee’s conduct was
unlawful.
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4.3
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Benefit Plan
Conduct . The
Indemnitee’s conduct with respect to an employee benefit plan
for a purpose the Indemnitee reasonably believed to be in the
interests of the participants in and beneficiaries of the plan
shall be deemed to be conduct that the Indemnitee reasonably
believed to be not opposed to the best interests of the
Corporation.
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4.4
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Reliance as
Safe Harbor . For
purposes of any Determination hereunder, 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 action or
proceeding, to have had no reasonable cause to believe the
Indemnitee’s conduct was unlawful, if the Indemnitee’s
action is based on (i) the records or books of account of the
Corporation or Another Enterprise, including financial statements,
(ii) information supplied to the Indemnitee by the officers or
agents of the Corporation or Another Enterprise in the course of
their duties, (iii) the advice of legal counsel for the Corporation
or Another Enterprise, or (iv) information or records given or
reports made to the Corporation or Another Enterprise by an
independent certified public accountant or by an appraiser or other
expert selected with reasonable care by the Corporation or another
enterprise. The provisions of this Section 4.4 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 Sections 1, 2 or 3 hereof, as the
case may be.
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4.5
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Success on Merits or
Otherwise .
Notwithstanding any other provision of this Agreement, to the
extent that the Indemnitee has been successful on the merits or
otherwise in defense of any action, suit or proceeding described in
Sections 1 or 2 hereof, or in defense of any claim, issue or matter
therein, the Indemnitee shall be indemnified against Losses in
connection with the investigation, defense, settlement or appeal
thereof. For purposes of this Section 4.5, the term
“successful on the merits or otherwise” shall include,
but not be limited to, (i) any termination, withdrawal, or
dismissal (with or without prejudice) of any claim, action, suit or
proceeding against the Indemnitee without any express finding of
liability or guilt against the Indemnitee, (ii) the expiration of
120 days after the making of any claim or threat of an action, suit
or proceeding
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without the institution of the same
and without any promise or payment made to induce a settlement, and
(iii) the settlement of any action, suit or proceeding under
Sections 1 or 2 hereof pursuant to which the Indemnitee pays less
than $100,000.
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4.6
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Partial
Indemnification or Reimbursement . If the Indemnitee is entitled under any
provision of this Agreement to indemnification and/or reimbursement
by the Corporation for some or a portion of the Losses in
connection with the investigation of, defense of, settlement of,
appeal of or testimony provided with respect to any action
specified in Section 1, 2 or 3 hereof, but not, however, for the
total amount thereof, the Corporation shall nevertheless indemnify
and/or reimburse the Indemnitee for the portion thereof to which
the Indemnitee is entitled. The party or parties making the
Determination shall determine the portion (if less than all) of
such Losses
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