Exhibit 10.1
INDEMNITY
AGREEMENT
THIS INDEMNITY AGREEMENT (this
“Agreement”) dated as of (INSERT DATE) is made
by and between DaVita Inc., a Delaware corporation, (the
“Company”), and (INSERT NAME) (the
“Indemnitee”).
R E C I T A
L S :
A. The Company recognizes that
competent and experienced persons are increasingly reluctant to
serve as directors and officers of corporations unless they are
protected by comprehensive liability insurance or indemnification,
or both, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the
fact that the exposure frequently bears no reasonable relationship
to the compensation of such directors.
B. The Company and the Indemnitee
recognize that plaintiffs often seek damages in such large amounts
and the costs of litigation may be so substantial (whether or not
the case is meritorious), that the defense and/or settlement of
such litigation is often beyond the personal resources of directors
and officers.
C. The Company believes that it is
unfair for its directors and officers to assume the risk of
substantial judgments and other expenses which may occur in cases
in which the director and/or officer, as the case may be, received
no personal profit and in cases where such person acted in good
faith.
D. Section 145 of the General
Corporation Law of the State of Delaware
(“Section 145”), under which the Company is
organized, and the Bylaws of the Company (the “Bylaws”)
empower the Company to indemnify its directors and officers by
agreement and to indemnify persons who serve, at the request of the
Company, as the directors and officers of other corporations or
enterprises, and expressly provides that the indemnification
provided by Section 145 and the Bylaws are not
exclusive.
E. The Board of Directors of the
Company (the “Board”) has determined that contractual
indemnification as set forth herein is not only reasonable and
prudent but necessary to promote the best interests of the Company
and its stockholders.
F. The Company desires and has
requested the Indemnitee to serve or continue to serve as a
director and/or officer of the Company.
G. This Agreement is a supplement to
and in furtherance of the Bylaws and any resolutions adopted
pursuant thereto, and shall not be deemed a substitute therefore,
nor to diminish or abrogate any rights of the Indemnitee
thereunder.
H. The Indemnitee is only willing to
serve, or to continue to serve, as a director and/or officer of the
Company if the Indemnitee is furnished the indemnity provided for
herein by the Company.
A G R E E M
E N T :
NOW THEREFORE, in consideration of
the mutual covenants and agreements set forth below, the parties
hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions .
(a) Agent . For purposes of
this Agreement, “agent” of the Company means any person
who: (i) is or was a director and/or officer of the Company or
a subsidiary of the Company; or (ii) is or was serving at the
request of, for the convenience of, or to represent the interest of
the Company or a subsidiary of the Company as a director and/or
officer of another foreign or domestic corporation, partnership or
joint venture.
(b) Change in Control . For
purposes of this Agreement, a “Change in Control” shall
be deemed to occur upon the earliest to occur after the date of
this Agreement of any of the following events:
i. Acquisition of Stock by Third
Party. Any Person (as defined below) is or becomes the Beneficial
Owner (as defined below), directly or indirectly, of securities of
the Company representing fifteen percent (15%) or more of the
combined voting power of the Company’s then outstanding
securities, other than such acquisition of securities as shall have
been previously approved by the Board;
ii. Change in Board of Directors.
During any twelve (12) month period (not including any period
prior to the execution of this Agreement), 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
Sections 1(b)(i), 1(b)(iii) or 1(b)(iv)) whose election by the
Board 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 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 of the members of the
Board;
iii. Corporate Transactions. The
effective date of 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 to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 51% of
the combined voting power of the voting securities of the surviving
entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the Board or
other governing body of such surviving entity;
iv. Liquidation. The approval by the
stockholders of the Company of a complete liquidation of the
Company or an agreement for the sale or disposition by the Company
of all or substantially all of the Company’s assets;
and
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v. Other Events. There occurs any
other event of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or a
response to any similar item on any similar schedule or form)
promulgated under the Exchange Act (as defined below), whether or
not the Company is then subject to such reporting
requirement.
For purposes of this
Section 1(b), the following terms shall have the following
meanings:
(A) “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
(B) “Person” shall have
the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that Person shall exclude
(i) the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company,
and (iii) any corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
(C) “Beneficial Owner”
shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act; provided, however, that Beneficial Owner shall
exclude any Person otherwise becoming a Beneficial Owner by reason
of the stockholders of the Company approving a merger of the
Company with another entity.
(c) Expenses . For purposes
of this Agreement, “expenses” includes all direct and
indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements,
other out-of-pocket costs and reasonable compensation for time
spent by the Indemnitee for which he is not otherwise compensated
by the Company or any third party, provided that the rate of
compensation and estimated time involved is approved in advance by
the Board), actually and reasonably incurred by the Indemnitee in
connection with either the investigation, defense or appeal of a
proceeding or establishing or enforcing a right to indemnification
under this Agreement, Section 145 or otherwise, and amounts
paid in settlement by or on behalf of the Indemnitee, but shall not
include any judgments, fines or penalties actually levied against
the Indemnitee.
(d) Disinterested Director .
For purposes of this Agreement, “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 the Indemnitee.
(e) Independent Counsel . For
purposes of this Agreement, “Independent Counsel” means
a law firm, or a member of a law firm, 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
(other than with respect to matters concerning the Indemnitee under
this 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.
Notwithstanding the foregoing, the term “Independent
Counsel” shall not
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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. The Company agrees to pay the reasonable fees
and expenses of the Independent Counsel referred to above and to
fully indemnify such counsel against any and all expenses, claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
(f) Proceedings . For the
purposes of this Agreement, “proceeding” shall include
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
legislative, or investigative nature, including any appeal
therefrom, in which Indemnitee was, is or will be involved as a
party, potential party, non-party witness or otherwise by reason of
the fact that Indemnitee is or was a director or officer of the
Company, by reason of any action taken by him or of any action on
his part while acting as director or officer of the Company, or by
reason of the fact that he is or was serving at the request of the
Company as a director or officer of another corporation, limited
liability company, partnership, joint venture, trust or other
enterprise, 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 Agreement; except one initiated by an
Indemnitee to enforce his rights under this Agreement.
(g) Subsidiary . For purposes
of this Agreement, “subsidiary” means any corporation
(or other entity) of which more than 50% of the outstanding voting
securities are owned directly or indirectly by the Company, by the
Company and one or more other subsidiaries, or by one or more other
subsidiaries.
2. Agreement to Serve . The
Indemnitee agrees to serve and/or continue to serve as an agent of
the Company, at the will of such corporation (or under separate
agreement, if such agreement exists), in the capacity the
Indemnitee currently serves as an agent of such corporation, so
long as the Indemnitee is duly appointed or elected and qualified
in accordance with the applicable provisions of the bylaws of such
corporation or of any subsidiary thereof, or until such time as the
Indemnitee tenders his resignation in writing; provided, however,
that nothing contained in this Agreement is intended to create any
right to continued employment of the Indemnitee in any
capacity.
3. Indemnification
.
(a) Indemnification in Third
Party Proceedings . Subject to Section 15 below, the
Company shall indemnify the Indemnitee if the Indemnitee is a party
to or threatened to be made a party to or otherwise involved in any
proceeding (other than a proceeding by or in the name of the
Company to procure a judgment in its favor) by reason of the fact
that the Indemnitee is or was an agent of the Company, or by reason
of any act or inaction by him in any such capacity (including, but
not limited to, any written statement of the Indemnitee that
(i) is required to be, and is, filed with the Securities and
Exchange Commission (the “SEC”) regarding the adequacy
of the Company’s internal controls or the accuracy of reports
or statements filed by the Company with the
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SEC pursuant to federal laws and/or
administrative regulations (each, a “Required
Statement”) or (ii) is made to another officer or
employee of the Company to support a Required Statement), against
any and all expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, fines and penalties)),
actually and reasonably incurred by him in connection with the
investigation, defense, settlement or appeal of such proceeding,
but only if the Indemnitee acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests
of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful, pursuant to the presumption set forth in
subsection (c) below, as applicable.
(b) Indemnification in Derivative
Actions . Subject to Section 15 below, the Company shall
indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any
proceeding by or in the name of the Company to procure a judgment
in its favor by reason of the fact that the Indemnitee is or was an
agent of the Company, or by reason of any act or inaction by him in
any such capacity (including, but not limited to, any written
statement of the Indemnitee that (i) is a Required Statement
or (ii) is made to another officer or employee of the Company
to support a Required Statement), against all expenses actually and
reasonably incurred by the Indemnitee in connection with the
investigation, defense, settlement, or appeal of such proceedings,
but only if the Indemnitee acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests
of the Company, pursuant to the presumption set forth in subsection
(c) below; provided, however, that no indemnification under
this subsection (b) shall be made in respect of any claim,
issue or matter as to which the Indemnitee shall have been finally
adjudged to be liable to the Company by a court of competent
jurisdiction due to willful misconduct of a culpable nature in the
performance of the Indemnitee’s duty to the Company, unless
and only to the extent that any 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, such person is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem
proper.
(c) Conclusive Presumption
Regarding Indemnitee Conduct . With respect to
Sections 3(a) and 3(b) above, the Indemnitee shall be
conclusively presumed to have 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
action or proceeding, to have had no reasonable cause to believe
Indemnitee’s conduct was unlawful, unless a determination is
made pursuant to the procedures set forth in Section 11 below
that the Indemnitee has not acted in accordance with the standards
set forth above.
4. Indemnification of Expenses of
Successful Party . Notwithstanding any other provisions of this
Agreement, to the extent that the Indemnitee has been successful on
the merits or otherwise in defense of any proceeding or in defense
of any claim, issue or matter therein, including the dismissal of
any action without prejudice, the Company shall indemnify the
Indemnitee against all expenses actually and reasonably incurred in
connection with the investigation, defense or appeal of such
proceeding.
5. Partial Indemnification .
If the Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for some or a portion of any
expenses or liabilities of
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any type whatsoever (including, but
not limited to, judgments, fines or penalties) actually and
reasonably incurred by him in the investigation, defense,
settlement or appeal of a proceeding but is not entitled, however,
to indemnification for the total amount thereof, the Company shall
nevertheless indemnify the Indemnitee for the portion thereof to
which the Indemnitee is entitled.
6. Indemnification For Expenses
of a Witness . Notwithstanding any other provision of this
Agreement, to the fullest extent permitted by applicable law and to
the extent that Indemnitee is, by reason of his status as an agent,
a witness in any proceeding to which Indemnitee is not a party, he
shall be indemnified against all expenses actually and reasonably
incurred by him or on his behalf in connection
therewith.
7. Advancement of Expenses .
Subject to Section 15(b) below, the Company shall advance, to
the fullest extent not prohibited by law, all expenses incurred by
the Indemnitee in connection with the investigation, defense,
settlement or appeal of any proceeding to which the Indemnitee is a
party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an agent of the Company. Advances
shall be unsecured and interest free. Advances shall be made
without regard to Indemnitee’s ability to repay the expenses
and without regard to Indemnitee’s ultimate entitlement to
indemnification under other provisions of this Agreement. Advances
shall include all reasonable expenses incurred pursuing an action
to enforce this right of advancement, including expenses incurred
preparing and forwarding statements to the Company to support the
advances claimed. By signing this Agreement, the Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the
extent that, it shall ultimately be determined that the Indemnitee
is not entitled to be indemnified by the Company as authorized by
this Agreement. The advances to be made hereunder shall be paid by
the Company to or on behalf of the Indemnitee within thirty
(30) days following delivery of a written request therefor by
the Indemnitee to the Company.
8. Notice and Other
Indemnification Procedures .
(a) Notification of
Proceeding . Promptly after receipt by the Indemnitee of notice
of the commencement of or the threat of commencement of any
proceeding, the Indemnitee shall, if the Indemnitee believes that
indemnification with respect thereto may be sought from the Company
under this Agreement, notify the Company of the commencement or
threat of commencement thereof. The failure of Indemnitee to so
notify the Company or comply with any other provision of this
Section 8 shall not itself relieve the Company of any
obligation which it may have to the Indemnitee under this Agreement
or otherwise.
(b) Request for
Indemnification . Any indemnification requested by the
Indemnitee under Section 3 hereof shall be made no later than
sixty (60) days after receipt of the written request of the
Indemnitee, unless a good faith determination is made within said
60-day period in accordance with one of the methods set forth in
Section 3(c) above that the Indemnitee is not or (subject to
final judgment or other final adjudication as provided in
Section 15(a) below) ultimately will not be entitled to
indemnification hereunder.
9. Assumption of Defense . In
the event the Company shall be obligated to pay the expenses of any
proceeding against the Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such proceeding, with
counsel reasonably acceptable to the Indemnitee, upon
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the delivery to the Indemnitee of
written notice of its election to do so. After delivery of such
notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company shall not be
liable to the Indemnitee under this Agreement for any fees of
counsel subsequently incurred by the Indemnitee with respect to the
same proceeding, provided that (a) the Indemnitee shall have
the right to employ his counsel in such proceeding at the
Indemnitee’s expense; and (b) if (i) the employment
of counsel by the Indemnitee has been previously authorized
in
