Exhibit 10.ee
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT is
made and entered into this day of
,
(“Agreement”), by and between Longs Drug Stores
Corporation, a Maryland corporation (the “Company”),
and
(“Indemnitee”).
WHEREAS, at the request of the
Company, Indemnitee currently serves as an officer of the Company
(“Officer”) and may, therefore, be subjected to claims,
suits or proceedings arising as a result of his service;
and
WHEREAS, as an inducement to
Indemnitee to continue to serve as such Officer, the Company has
agreed to indemnify and to advance expenses and costs incurred by
Indemnitee in connection with any such claims, suits or
proceedings, to the fullest extent permitted by law; and
WHEREAS, the parties by this
Agreement desire to set forth their agreement regarding
indemnification and advance of expenses;
NOW, THEREFORE, in consideration of
the premises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
Section 1. Definitions . For
purposes of this Agreement:
(a) “Change in Control”
means a change in control of the Company occurring after the
Effective Date of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form)
promulgated under the Securities Exchange Act of 1934 (the
“Act”), whether or not the Company is then subject to
such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have
occurred if after the Effective Date (i) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Act) is or
becomes the “beneficial owner” (as defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the
Company representing 15% or more of the combined voting power of
the Company’s then outstanding securities without the prior
approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining such
percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan
of liquidation or other reorganization not approved by at least
two-thirds of the members of the Board of Directors then in office,
as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute
less than a majority of the Board of Directors thereafter; or (iii)
during any period of two consecutive years, other than as a result
of an event described in clause (a)(ii) of this Section 1,
individuals who at the beginning of such period constituted the
Board of Directors (including for this purpose any new director
whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning
of such period) cease for any reason to constitute at least a
majority of the Board of Directors.
(b) “Corporate Status”
means the status of a person who is or was a director, trustee,
officer, employee or agent of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which such person is or was serving at the
request of the Company.
(c) “Effective Date”
means the date set forth in the first paragraph of this
Agreement.
(d) “Expenses” shall
include all reasonable attorneys’ fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a
Proceeding.
(e) “Independent
Counsel” means a law firm, or a member of a law firm,
selected by the Board of Directors by vote as set forth in Section
9(b), that is experienced in matters of corporation law and neither
presently 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, 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 Company or Indemnitee in an
action to determine Indemnitee’s rights under this
Agreement.
(f) “Proceeding”
includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding, whether civil,
criminal, administrative or investigative (including on appeal),
except one (i) initiated by an Indemnitee pursuant to Section 11 of
this Agreement to enforce his rights under this Agreement or (ii)
pending or completed on or before the Effective Date, unless
otherwise specifically agreed in writing by the Company and
Indemnitee.
Section 2. Services by
Indemnitee . Indemnitee will serve as an Officer of the
Company. However, this Agreement shall not impose any obligation on
Indemnitee or the Company to continue Indemnitee’s service to
the Company beyond any period otherwise required by law or by other
agreements or commitments of the parties, if any.
Section 3. Indemnification -
General . The Company shall indemnify, and advance Expenses to,
Indemnitee (a) as provided in this Agreement and (b) otherwise to
the fullest extent permitted by Maryland law in effect on the date
hereof and as amended from time to time; provided, however, that no
change in Maryland law shall have the effect of reducing the
benefits available to Indemnitee hereunder based on Maryland law as
in effect on the date hereof. The rights of Indemnitee provided in
this Section 3 shall include, without limitation, the rights set
forth in the other sections of this Agreement, including any
additional indemnification permitted by the Maryland General
Corporation Law (“MGCL”).
Section 4. Proceedings Other Than
Proceedings by or in the Right of the Company . Indemnitee
shall be entitled to the rights of indemnification provided in this
Section 4 if, by reason of his Corporate Status, he is, or is
threatened to be, made a party to or a witness in any threatened,
pending, or completed Proceeding, other than a Proceeding by or in
the right of the
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Company. Pursuant to this Section 4, Indemnitee
shall be indemnified against all Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with a Proceeding by
reason of his Corporate Status unless it is established that (i)
the act or omission of Indemnitee was material to the matter giving
rise to the Proceeding and (a) was committed in bad faith or (b)
was the result of active and deliberate dishonesty, (ii) Indemnitee
actually received an improper personal benefit in money, property
or services, or (iii) in the case of any criminal Proceeding,
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
Section 5. Proceedings by or in
the Right of the Company . Indemnitee shall be entitled to the
rights of indemnification provided in this Section 5 if, by reason
of his Corporate Status, he is, or is threatened to be, made a
party to or a witness in any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 5, Indemnitee shall
be indemnified against all amounts paid in settlement and all
Expenses actually and reasonably incurred by him or on his behalf
in connection with such Proceeding unless it is established that
(i) the act or omission of Indemnitee was material to the matter
giving rise to such a Proceeding and (a) was committed in bad faith
or (b) was the result of active and deliberate dishonesty or (ii)
Indemnitee actually received an improper personal benefit in money,
property or services.
Section 6. Court-Ordered
Indemnification . Notwithstanding any other provision of this
Agreement, a court of appropriate jurisdiction, upon application of
an Officer and such notice as the court shall require, may order
indemnification in the following circumstances:
(a) if it determines an Officer is
entitled to reimbursement under the MGCL, the court shall order
indemnification, in which case the Officer shall be entitled to
recover the expenses of securing such reimbursement; or
(b) if it determines that the
Officer is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not the Officer
(i) has met the standards of conduct set forth in the MGCL or (ii)
has been adjudged liable for receipt of an improper personal
benefit under the MGCL, the court may order such indemnification as
the court shall deem proper. However, indemnification with respect
to any Proceeding by or in the right of the Company or in which
liability shall have been adjudged in the circumstances described
in the MGCL shall be limited to Expenses.
Section 7. Indemnification for
Expenses of a Party Who is Wholly or Partly Successful .
Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by
reason of his Corporate Status, made a party to and is successful,
on the merits or otherwise, in the defense of any Proceeding, he
shall be indemnified for all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but 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 under this Section 7 for all Expenses
actually and reasonably incurred by him or on his behalf in
connection with each successfully resolved claim, issue or matter.
For purposes of this 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.
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Section 8. Advance of
Expenses . The Company shall advance all reasonable Expenses
incurred by or on behalf of Indemnitee in connection with any
Proceeding to which Indemnitee is, or is threatened to be, made a
party or a witness, within ten days after the receipt by the
Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by a
written affirmation by Indemnitee of Indemnitee’s good faith
belief that the standard of conduct necessary for indemnification
by the Company as authorized by law and by this Agreement has been
met and a written undertaking by or on behalf of Indemnitee, in
substantially the form attached hereto as Exhibit A or in
such form as may be required under applicable law as in effect at
the time of the execution thereof, to reimburse any Expenses
advanced to Indemnitee if it shall ultimately be determined that
such standard of conduct has not been met or as required by Section
7 if Indemnitee is wholly or partly unsuccessful. The undertaking
required by this Section 8 shall be an unlimited general obligation
by or on behalf of Indemnitee and shall be accepted without
reference to Indemnitee’s financial ability to repay such
advanced Expenses.
Section 9. Procedure for
Determination of Entitlement to Indemnification .
(a) To obtain indemnification under
this Agreement, Indemnitee shall submit to the Company 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. The Secretary of the
Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
(b) Upon written request by
Indemnitee for indemnification pursuant to the first sentence of
Section 9(a) hereof, a determination, if required by applicable
law, with respect to Indemnitee’s entitlement thereto shall
promptly be made in the specific case: (i) if a Change in Control
shall have occurred, by Independent Counsel in a written opinion to
the Board of Directors, a copy of which shall be delivered to
Indemnitee; or (ii) if a Change of Control shall not have occurred,
(A) by the Board of Directors (or a duly authorized committee
thereof) by a majority vote of a quorum, or (B) if a quorum of the
Board of Directors is not obtainable or, even if obtainable, such
quorum so directs, by Independent Co
