INDEMNITY AMENDMENT
THIS INDEMNITY AGREEMENT (this “Agreement”) dated as of
________________ is made by Advance Auto Parts, Inc., a Delaware
corporation (the “Company”), and ______________ (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 of corporations unless thery 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 statutes and judicial
decisions regarding the duties of directors are often difficult to
apply, ambiguous, or conflicting, and therefore fail to provide
such directors with adequate, reliable knowledge of legal risks to
which they are exposed or information regarding the proper course
of action to take.
C. 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.
D. The Company believes that it
is unfair for its directors to assume the risk of substantial
judgments and other expenses which may occur in cases in which the
director received no personal profit and in cases where such person
acted in good faith.
E. Section 145 of the General
Corporation Law of Delaware (“Section 145”), under
which the Company is organized, empowers the Company to indemnify,
among others, its directors by agreement and to indemnify persons
who serve, at the request of the Company, as the directors of other
corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not
exclusive.
F. The Board of Directors of
the Company 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.
G. The Company desires and has
requested the Indemnitee to serve or continue to serve as a
director of the Company.
H. The Indemnitee only is
willing to serve, or to continue to serve, as a director 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 convenants and
agreements set forth below, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Definitions
. For purposes of this Agreement, the
following terms shall have the meanings set forth below:
(a) “Agent” of
the Company shall mean any person who: (i) is or was a director 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 as a
director of a Subsidiary of the Company or of another foreign or
domestic corporation, partnership, joint venture, trust or other
enterprise.
(b) “Expenses”
shall mean all direct and indirect costs of any type or nature
whatsoever including, without limitation, all attorney’s
fees, fees of experts, witness fees, travel fees, and all related
disbursements, or other out-of-pocket costs of the types
customarily incurred in connection with prosecuting, defending or
appealing, preparing to prosecute, defend or appeal investigations,
being or preparing to be a witness in or otherwise participating
in, a Preceeding or establishing or enforcing a right to
indemnification under this Agreement, Section 145 or
otherwise.
(c) “Proceeding”
shall mean any threatened, pending, or completed action, suit,
arbitration, mediation hearing or other proceeding, whether civil,
criminal, administrative, legislative, investigative or any other
type whatsoever.
(d) “Subsidiary”
shall mean any corporation of which more than 50% of the
outstanding voting securities are owned directly or indirectly by
the Company.
2. Agreement to Serve
. The Indemnitee agrees to serve and/or
continue to serve as an Agent for so long as the Indemnitee is duly
appointed or elected and qualified in accordance with the
applicable provisions of the bylaws of the Company or of any
Subsidiary thereof, or until such time as the Indemnitee tenders
his resignation in writing or is removed from his or her position
in accordance with the bylaws of the Company or otherwise;
provided , however , that nothing contained in this
Agreement is intended to create any right to continued service with
the Company or any other entity in any capacity.
3. Indemnification
.
(a) Indemnification in
Third Party Proceedings .
(i) Subject
to Section 10 hereof, 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, or by reason of any act or inaction by Indemnitee in any
such capacity (including, but not limited to, any written statement
of the Indemnitee that (A) 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
SEC pursuant to federal laws and/or administrative regulations
(each, a “Required Statement”) or (B) 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
(including any excise taxes assessed with respect to any employee
benefit plan), penalties and, subject to Section 10(d)
hereof, amounts paid in settlement), actually and
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reasonably incurred by Indemnitee
in connection with the investigation, defense, settlement or appeal
of such Proceeding, but only if the Indemnitee, subject to the
presumption set forth in Section 3(c) hereof, acted in good
faith and in a manner the Indemnitee reasonably believed to be in,
or not opposed to, the best interests of the Company, and, with
respect to any criminal Proceeding, had no reasonable cause to
believe Indemnitee’s conduct was unlawful.
(ii) The
termination of any 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 in a manner which the Indemnitee reasonably
believed to be in, or not opposed to, the best interests of the
Company, and, with respect to any criminal Proceeding, that the
Indemnitee had reasonable cause to believe that the
Indemnitee’s conduct was unlawful.
(b) Indemnification in
Derivative Actions . Subject to
Section 10 hereof, 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, or by reason of
any act or inaction by the Indemnitee 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, subject to the presumption set forth in Section
3(c) hereof, acted in good faith and in a manner the Indemnitee
reasonably believed to be in, or not opposed to, the best interests
of the Company; 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, except 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, the Indemnitee 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) hereof, 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 Proceeding, to have had
no reasonable cause to believe Indemnitee’s conduct was
unlawful, unless a determination is made that the Indemnitee has
not acted in accordance with the standards set forth above (i) by
the Board of Directors of the Company by a majority vote of a
quorum thereof consisting of directors who were not parties to the
Proceeding due to which a claim is made under this Agreement, (ii)
by the stockholders of the Company by a majority vote of
stockholders who were not parties to such a Proceeding, or (iii) in
a written opinion of independent legal counsel, selection of whom
has been approved by the Indemnitee in writing or by a panel of
arbitrators, one of whom is selected by the Company, another of
whom is selected by the Indemnitee and the last of whom is selected
by the first two arbitrators so selected.
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
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or otherwise in defense of (a)
any Proceeding referred to in Section 3(a) or 3(b)
hereof or (b) any claim, issue or matter therein, including the
dismissal of any action without prejudice, the Company shall
indemnify the Indemnitee (to the maximum extent permitted by law)
against all Expenses actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense or appeal
of such Proceeding, or any claim, issue or matter
therein.
5. Partial
Indemnification . If th
