Exhibit 10.28
INDEMNITY
AGREEMENT
This Indemnification Agreement
(“Agreement”) is made as of [
] by and between Kraft Foods Inc., a Virginia corporation (the
“Company”), and [
] (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons
have become more reluctant to serve publicly-held corporations as
directors unless they are provided with adequate indemnification
against risks of claims and actions against them arising out of
their service to and activities on behalf of the
corporation;
WHEREAS, the Articles of
Incorporation of the Company and the Virginia Stock Corporation Act
(the “Virginia Act”) expressly provide that the
indemnification provisions set forth therein are not exclusive, and
thereby contemplate that contracts may be entered into between the
Company and members of the board of directors, officers and other
persons with respect to indemnification;
WHEREAS, a recent court decision in
Delaware has created concerns as to the reliability of
indemnification of directors as protection against personal
liability;
WHEREAS, it is reasonable and
prudent for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of, its directors to
the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that
they will not be protected, and to confirm that when they cease to
be directors they will continue to be entitled to such
indemnification and advancement of expenses; and
WHEREAS, this Agreement is a
supplement to and in furtherance of the Articles of Incorporation
of the Company and any resolutions adopted pursuant thereto, and
shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder;
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. Services to the
Company . Indemnitee agrees to serve as a director of the
Company. Indemnitee may at any time and for any reason resign from
such position (subject to any other contractual obligation or any
obligation imposed by operation of law). This Agreement shall not
be deemed an employment contract between the Company and
Indemnitee. The foregoing notwithstanding, this Agreement shall
continue in force after Indemnitee has ceased to serve as a
director of the Company.
Section 2. Definitions .
As used in this Agreement:
(a) 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 thirty percent (30%) or more of the
combined voting power of the Company’s then outstanding
securities;
(ii) Change in Board of Directors.
During any period of two (2) consecutive years (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
effected, or entered into an agreement with the Company to effect,
a transaction described in Sections 2(a)(i), 2(a)(iii) or
2(a)(iv)) whose election by the Board or nomination for election by
the Company’s shareholders was approved by a vote of at least
a majority 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 50% 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 of
directors or other governing body of such surviving
entity;
(iv) Dissolution or Disposition of
Assets. The approval by the shareholders of the Company of the
dissolution of the Company or of an agreement for the sale or
disposition by the Company of all or substantially all of the
Company’s assets; and
(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 2(a), 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 shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
(C) “Beneficial Owner”
shall have the meaning
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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 shareholders of the Company approving a merger of the
Company with another entity, and further provided, that any
calculation of securities beneficially owned by a Beneficial Owner
shall include securities that are the subject of a derivative that
creates for the Beneficial Owner the economic equivalent of
ownership in such securities for the Beneficial Owner by tying the
value of the derivative to the price or value of such
securities.
(b) “Corporate Status”
describes the status of a person who is or was a director, officer,
employee or agent of the Company or of any other corporation,
limited liability company, partnership or joint venture, trust,
employee benefit plan or other enterprise which such person is or
was serving at the request of the Company.
(c) “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 Indemnitee.
(d) “Enterprise” shall
mean the Company and any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan
or other enterprise of which Indemnitee is or was serving at the
request of the Company as a director, officer, employee, agent or
fiduciary.
(e) “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, being or preparing to be a witness in, or
otherwise participating in, a Proceeding. Expenses also shall
include Expenses incurred in connection with any appeal resulting
from any Proceeding, including without limitation the premium,
security for, and other costs relating to any cost bond,
supersedeas bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee
or the amount of judgments or fines against Indemnitee.
(f) “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 three 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 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 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
indemnify such counsel fully against any and all Expenses, claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
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(g) The term
“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 or investigative nature, in which
Indemnitee was, is or will be involved as a party or otherwise by
reason of the fact that Indemnitee is or was a director of the
Company, by reason of any action taken by him or of any action on
his part while acting as director of the Company, or by reason of
the fact that he is or was serving at the request of the Company as
a director, officer, employee or agent 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 Indemnitee
to enforce his rights under this Agreement.
(h) Reference to “other
enterprise” shall include employee benefit plans; references
to “fines” shall include any excise tax assessed with
respect to any employee benefit plan; references to “serving
at the request of the Company” shall include any service as a
director of the Company which imposes duties on, or involves
services by, such director with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in
good faith and in a manner he reasonably believed to be in the best
interests of the participants and beneficiaries of an employee
benefit plan shall be deemed not to have engaged in willful
misconduct or a knowing violation of criminal law.
Section 3. (a) Indemnity in
Third-Party Proceedings . The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3
if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding, including a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant
to this Section 3, Indemnitee shall be indemnified to the
fullest extent permitted by applicable law against all Expenses,
judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee or on his behalf in connection
with such Proceeding or any claim, issue or matter therein, except
for indemnification of the Indemnitee for his willful misconduct or
his knowing violation of the criminal law.
(b) Settlement .
(i) The Company shall have no
obligation to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any Proceeding Indemnitee effected
without the Company’s prior written consent, not to be
unreasonably withheld.
(ii) The Company shall not, without
the prior written consent of Indemnitee (not to be unreasonably
withheld), consent to the entry of any judgment against Indemnitee
or enter into any settlement or compromise which (A) includes
an admission of fault of Indemnitee, any non-monetary remedy
affecting or obligation of Indemnitee, or monetary obligation for
which Indemnitee is not indemnified hereunder or (B) with
respect to any
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Proceeding with respect to which Indemnitee is
likely to be or is made a party, witness or participant or is
otherwise entitled to seek indemnification hereunder, does not
include, as an unconditional term thereof, the full release of
Indemnitee from all liability in respect of such Proceeding, which
release shall be in form and substance reasonably satisfactory to
Indemnitee.
Section 4. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful .
Notwithstanding any other provisions of this Agreement, (other than
Section 6(a) or (c) of this Agreement), to the fullest
extent permitted by applicable law and to the extent that
Indemnitee is a party to (or a participant in) and is successful,
on the merits or otherwise, in any Proceeding or in defense of any
claim, issue or matter therein, in whole or in part, the Company
shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him 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,
subject to Section 6(a) and (c) of this Agreement,
indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. If the Indemnitee is
not wholly successful in such Proceeding, the Company also shall,
subject to Section 6(a) and (c) of this Agreement,
indemnify Indemnitee against all Expenses reasonably incurred in
connection with a claim, issue or matter related to any claim,
issue, or matter on which the Indemnitee was successful. For
purposes of this Section 4 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.
Section 5. Indemnification
For Expenses of a Witness . Notwithstanding any other provision
of this Agreement (other than Section 6(a) and (c) of
this Agreement), to the fullest extent permitted by applicable law
and to the extent that Indemnitee is, by reason of his Corporate
Status, 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.
Section 6. Exclusions .
Notwithstanding any provision in this Agreement, the Company shall
not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for which payment has actually
been made to or on behalf of Indemnitee under any insurance policy
or other indemnity provision, except with respect to any excess
beyond the amount paid under any insurance policy or other
indemnity provision; or
(b) for an accounting of profits
made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Securities Exchange Act of 1934, as
amended; or
(c) in connection with any
Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated
by Indemnitee prior to a Change of Control against the Company or
its directors, officers, employees or other indemnitees, unless
(i) the Board of Directors of the Company authorized the
Proceeding (or any part of any Proceeding) prior to its initiation
or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under
applicable law.
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Section 7. Advances of
Expenses .
(a) In accordance with the
pre-existing requirement of Section VI C of the Articles of
Incorporation of the Company, and notwithstanding any provision of
this Agreement to the contrary but subject to Section 7(c) of
this Agreement, the Company shall advance, to the extent not
prohibited by law, the Expenses reasonably incurred by Indemnitee
in connection with any Proceeding, and such advancement shall be
made within 30 days after the receipt by the Company of a statement
or statements requesting such advances (supported by statements in
reasonable detail of Expenses incurred or to be incurred within the
next 30 days) from time to time, whether prior to or after final
disposition of any Proceeding. 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
the other provisions of this Agreement. Advances shall include any
and 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. The Indemnitee shall qualify for advances upon the
execution and delivery to the Company of this Agreement which shall
constitute an undertaking that the Indemnitee will repay the
advance to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the
Company.
(b) In the event the Company is
obligated under this Section 7 hereof to pay, and pays the
Expenses of any Proceeding against Indemnitee, the Com
