Exhibit 10.5.2
INDEMNITY AGREEMENT
This
INDEMNITY AGREEMENT dated as of November 10,
1999, is made by and
between Knight Transportation, Inc. (the "Corporation"), and Mark A. Scudder
(the "Indemnitee").
RECITALS
The Articles of
Incorporation
and By-Laws of the
Corporation provide
for
indemnification by the Corporation of its directors to the fullest extent
permitted by law. The Indemnitee has been serving and desires to
continue to
serve as a director of the Corporation in part in reliance on such indemnity
provision.
To provide the Indemnitee with additional contractual assurance of
protection against personal liability in connection with
certain
proceedings
described below, the Corporation desires to
enter into this Agreement.
In order to
induce the Indemnitee to serve or continue to serve as a
director of the Corporation, and in consideration of the Indemnitee's so
serving, the Corporation desires to indemnify the Indemnitee and to make
arrangements pursuant to which the Indemnitee may be advanced or reimbursed
expenses incurred by Indemnitee in certain proceedings described below,
according to the terms and conditions set
forth below.
AGREEMENT
THEREFORE,
in consideration of
the foregoing recitals
and of Indemnitee's
serving or continuing to serve the
Corporation as a director, the parties agree
as follows:
1.
Indemnification.
(a) In
accordance with the
provisions of subsection (b) of this Section 1,
the Corporation shall hold harmless and
indemnify the Indemnitee against any and
all expenses, liabilities and losses (including, without limitation,
investigation expenses and expert witnesses' and attorneys' fees and
expenses,
costs of court, judgments, penalties, fines, and amounts paid or to be
paid in
settlement) actually incurred by the Indemnitee (net of
any related
insurance
proceeds or other amounts received by Indemnitee or paid by
or on behalf of the
Corporation on the Indemnitee's behalf), in
connection with any action, suit, or
proceeding, whether civil, criminal,
administrative, or
investigative, to which
the Indemnitee is a party or is
threatened to be made a party (a "Proceeding")
based upon, arising from, relating to, or by reason of the
fact that Indemnitee
is, was, shall be, or shall have been a director and/or officer of the
Corporation or is or was serving, shall serve, or shall have served at the
request of the Corporation as a director,
officer, partner, trustee, member,
employee, or agent ("Affiliate Indemnitee") of another foreign or domestic
corporation or non-profit corporation,
cooperative,
partnership, joint venture,
limited liability company, trust or other incorporated or unincorporated
enterprise (each, a "Company
Affiliate").
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(b) Without limiting
the generality of the foregoing, the Indemnitee shall
be entitled to the rights of
indemnification
provided in this Section 1 for any
expenses actually incurred in any
Proceeding initiated by or in the right of the
Corporation, unless indemnification is barred by A.R.S. ss.ss. 10-851.D or
10-856.A, or any other applicable law.
(c) In providing
the foregoing indemnification, the Corporation shall, with
respect to any proceeding, hold harmless and indemnify the Indemnitee to the
fullest extent not prohibited by the law of the State
of Arizona, as in
effect
from time and time, and the Articles of Incorporation. For purposes of this
Agreement, it is intended that the
indemnification
afforded hereby be mandatory
and the broadest possible under any then
existing statutory
provision expressly
authorizing the Corporation to indemnify
directors or officers whether in effect
on the date of this Agreement or hereafter, provided, however, that the
indemnification provisions of this Agreement shall apply without regard to
whether any provision set forth in the Articles or Bylaws of the
Corporation
authorizing or permitting indemnification
shall be in force or effect.
2. Other
Indemnification
Agreements.
The Corporation may purchase and
maintain insurance or furnish similar protection or make other
arrangements,
including, but not limited to, providing a trust fund, letter of credit, or
surety bond ("Indemnification
Arrangements") on behalf of the Indemnitee against
any liability asserted against him or her or
incurred by or on behalf of him or
her in such capacity as a director or officer of the Corporation or an
Affiliated Indemnitee, or arising out of his or her
status as such, whether or
not the Corporation would have the power to indemnify
him or her against
such
liability under the provisions of this
Agreement. The
purchase,
establishment,
and maintenance of any such
Indemnification
Arrangement
shall not in any
way
limit or affect the rights and obligations of the Corporation or of the
Indemnitee under this Agreement except as
expressly provided
herein, and the
execution and delivery of this Agreement by
the Corporation
and the Indemnitee
shall not in any way limit or affect the rights and obligations of the
Corporation or the other party or parties
thereto under any such Indemnification
Arrangement. All amounts payable by the
Corporation pursuant
to this Section 2
and Section 1 hereof are herein
referred to as
"Indemnified
Amounts." To the
extent the Corporation is able to obtain directors and officers liability
insurance of a reasonable premium (as determined by the
Corporation in its sole
discretion), the Corporation shall use reasonable efforts to cause the
Indemnitee to be covered by such
insurance.
3. Advance
Payment of Indemnified Amounts.
(a) The
Indemnitee
hereby is granted the
right to receive in advance of a
final, nonappealable judgment or other final
adjudication
of a Proceeding (a
"Final Determination") the amount of any
and all expenses,
including, without
limitation, investigation expenses, court costs, expert witnesses' and
attorneys' fees and other expenses expended or incurred by the
Indemnitee in
connection with any Proceeding or otherwise expensed or incurred by the
Indemnitee (such amounts so expended or
incurred being
hereinafter referred
to
as "Advanced Amounts").
(b) In making
any written request
for Advanced
Amounts, the Indemnitee
shall submit to the Corporation a schedule
setting forth in
reasonable detail
the dollar amount expended or incurred and expected
to be expended. Each
such
listing shall be supported
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by the bill, agreement, or other documentation
relating thereto, each
of which
shall be appended to the schedule as an exhibit. In addition, before the
Indemnitee may receive Advanced Amounts from the Corporation, the Indemnitee
shall provide to the Corporation (i) a
written affirmation of
the Indemnitee's
good faith belief that the applicable standard of conduct required for
indemnification by the Corporation has been satisfied by the
Indemnitee,
and
(ii) a written undertaking by or on behalf of the Indemnitee to repay the
Advanced Amount if it shall ultimately be
determined that the Indemnitee has not
satisfied any applicable standard of
conduct. The written
undertaking
required
from the Indemnitee shall be an unlimited
general obligation of the Indemnitee
but need not be secured. The Corporation shall pay to the Indemnitee all
Advanced Amounts within twenty (20) days
after receipt by the Corporation of all
information and documentation required to
be provided by the Indemnitee pursuant
to this paragraph.
4. Procedure for
Payment of Indemnified Amounts.
(a) To obtain
indemnification
under this Agreement,
the Indemnitee
shall
submit to the Corporation a written request for payment of the appropriate
Indemnified Amounts, including with such requests such documentation and
information as is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the
Indemnitee is entitled to
indemnification. The Secretary of the Corporation
shall, promptly upon
receipt
of such a request for indemnification,
advise the Board of
Directors in writing
that the Indemnitee has requested
indemnification.
(b) The
Corporation shall pay
the Indemnitee the
appropriate
Indemnified
Amounts unless it is established that the Indemnitee engaged in one of the
Prohibited Acts, and such Prohibited Act was the subject matter of the
Proceeding. For purposes of determining whether the Indemnitee is entitled
to
Indemnified Amounts, in order to deny indemnification to the Indemnitee,
the
Corporation has the burden of proof in establishing (1) that the Indemnitee
engaged in the Prohibited Act, and (2) that the Prohibited
Act was the subject
matter of the Proceeding. In this regard, a termination of any Proceeding by
judgment, order or settlement does not
create a presumption that the Indemnitee
did not meet the requisite standard of conduct; provided, however, that the
termination of any criminal proceeding by conviction, or a pleading of nolo
contendere or its equivalent, or an entry of an order of
probation prior to
judgment, creates a rebuttable presumption that the Indemnitee engaged in a
Prohibited Act. For purposes of this
Agreement, a
Prohibited Act shall mean any
act, omission or condition (i)
described in A.R.S. ss. 10-851.D or 10-856.A for
which the Corporation may not indemnify the
Indemnitee or (ii) any act, omission
or condition for which indemnity is not
available under any federal or state law
or public policy.
(c) Any
determination
that the Indemnitee
has engaged in a Prohibited Act
shall be made (i) either by the Board of Directors by a majority vote of a
quorum consisting of directors who were not
parties to such Proceeding; or (ii)
by independent legal counsel (who may be
the outside counsel regularly employed
by the Corporation); provided that the manner in which
(and, if applicable, the
counsel by which) the right of
indemnification
is to be determined shall be
approved in advance in writing by both the
highest ranking
executive officer of
the Corporation who is not a party to such action (sometimes hereinafter
referred to as "Senior Officer") and by the Indemnitee.
In the event that
such
parties are unable to agree on the
manner
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in which any such determination is to be
made, such determination shall be made
by independent legal counsel retained by the Corporation especially for such
purpose, provided that such counsel be approved in advance in
writing by both
the Senior Officer and the Indemnitee and,
provided further,
that such counsel
shall not be outside counsel regularly
employed by the Corporation. The fees and
expenses of counsel in connection with making the determination contemplated
hereunder shall be paid by the Corporation, and, if requested by such
counsel,
the Corporation shall give such counsel an
appropriate written
agreement with
respect to the payment of their fees and
expenses and such other matters as may
be reasonably requested by counsel.
(d) The
Corporation
will use its best efforts to conclude as soon as
practicable any required determination pursuant to subparagraph
(c) above and
promptly will advise the Indemnitee in
writing with respect to any determination
that the Indemnitee is or is not entitled to indemnification, including a
description of any reason or basis for which
indemnification
has been denied.
Payment of any applicable Indemnified Amounts will be made to the
Indemnitee
within ten (10) days after any
determination of the Indemnitee's entitlement to
indemnification.
(e) Notwithstanding the foregoing, the Indemnitee may, at any time
after
sixty (60) days after a claim for
Indemnified
Amounts has been filed with the
Corporation (or upon receipt of written notice that a claim for Indemnified
Amounts has been rejected, if earlier) and before three (3)
years after a claim
for Indemnified Amounts has been filed, petition a court of competent
jurisdiction to determine whether the
Indemnitee is entitled to indemnification
under the provisions of this Agreement,
and such court shall
thereupon have the
exclusive authority to make such determination unless and until such court
dismisses or otherwise terminates such action without having made such
determination. The court shall, as
petitioned, make an independent determination
of whether the Indemnitee is entitled to
indemnification as
provided under this
Agreement, irrespective of any prior determination made by the Board of
Directors or independent counsel. If the court shall determine that the
Indemnitee is entitled to indemnification as to any claim, issue or matter
involved in the Proceeding with respect to which there has been no prior
determination pursuant to this Agreement or
with respect to which there has been
a prior determination that the Indemnitee was not
entitled to
indemnification
hereunder, the Corporation shall pay all
expenses (including attorneys' fees and
court costs) actually incurred by the Indemnitee in connection with such
judicial determination.
5. Agreement Not Exclusive;
Subrogation Rights, etc.
(a) This
Agreement shall not be deemed exclusive of and shall not
diminish
any other rights the Indemnitee may have to be indemnified or insured or
otherwise protected against any liability,
loss, or expense by
the Corporation,
any subsidiary of the Corporation, or any other person or entity under any
charter, bylaws, law, agreement, policy of
insurance or similar protection, vote
of stockholders or directors, disinterested
or not, or otherwise, whether or not
now in effect, both as to actions in the
Indemnitee's official capacity, and as
to actions in another capacity while holding such office. The Corporation's
obligations to make payments of Indemnified
Amounts hereunder shall be satisfied
to the extent that payments with respect to the same Proceeding (or part
thereof) have been made to or for the
benefit of the
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Indemnitee by reason of the indemnification of the Indemnitee pursuant to any
other arrangement made by the Corporation
for the benefit of the Indemnitee.
(b) In the event
the Indemnitee
shall receive
payment from any
insurance
carrier or from the plaintiff in any Proceeding against such Indemnitee in
respect of Indemnified Amounts after payments on account
of all or part of such
Indemnified Amounts have been made by the
Corporation
pursuant hereto, such
Indemnitee shall promptly reimburse to the Corporation the
amount, if any, by
which the sum of such payment by such
insurance carrier or such plaintiff and
payments by the Corporation or pursuant to
arrangements made by
the Corporation
to Indemnitee exceeds such Indemnified
Amounts; provided, however, that such
portions, if any, of such insurance proceeds
that are required to be reimbursed
to the insurance carrier under the terms of its insurance policy, such as
deductible or co-insurance payments, shall not be deemed to be payments
to the
Indemnitee hereunder. In addition, upon payment of Indemnified Amounts
hereunder, the Corporation shall be subrogated to the rights of Indemnitee
receiving such payments (to the extent
thereof) against any insurance carrier
(to the extent permitted under such
insurance policies) or
plaintiff in respect
to such Indemnified Amounts and the
Indemnitee shall execute and deliver any and
all instruments and documents and
perform any and all other acts or deeds which
the Corporation deems necessary or advisable to
secure such rights.
Such right
of subrogation shall be terminated upon
receipt by the Corporation of the amount
to be reimbursed by the Indemnitee pursuant to the first sentence of this
paragraph.
6. Continuation of Indemnity. All agreements and obligations of the
Corporation contained herein shall continue during the
period Indemnitee is
a
director of the Corporation (or is serving at the
request of the Corporation as
an Affiliate Indemnitee) and shall continue thereafter so long as
Indemnitee
shall be subject to any possible Proceeding by reason of the fact that
Indemnitee was a director, officer or
employee of the Corporation or was serving
in any other capacity referred to
herein.
7. Successors;
Binding Agreement. This Agreement shall be binding on
and
shall inure to the benefit of and be
enforceable by the Corporation's successors
and assigns and by the Indemnitee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. The Corporation shall require any successor or assignee (whether
direct or indirect, by purchase, merger,
consolidation, or
otherwise) to all or
substantially all of the business and/or assets
of the Corporation, by
written
agreement in form and substance
reasonably
satisfactory to the
Corporation and
to the Indemnitee, expressly to assume and agree to
perform this
Agreement
