Exhibit 10.1
Indemnification
Agreement
AGREEMENT, effective as of
,
2008, between Walter Industries, Inc., a Delaware corporation
(the “Corporation”), and
(the
“Indemnitee”).
WHEREAS, it is essential to the
Corporation to retain and attract as directors and officers the
most capable persons available;
WHEREAS, Indemnitee is a director or
officer of the Corporation;
WHEREAS, both the Corporation and
Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of public
companies in today’s environment and that competent and
experienced individuals are increasingly reluctant to serve or to
continue to serve as directors or officers of public corporations
unless they are protected by comprehensive liability insurance or
indemnification, or both, due to such increased risk;
WHEREAS, Section 145 of the
Delaware General Corporation Law (“Section 145”),
under which the Corporation is organized, empowers the Corporation
to indemnify its directors and officers by agreement and to
indemnify persons who serve, at the request of the Corporation, as
directors or officers, and expressly provides that the
indemnification provided by Section 145 is not
exclusive;
WHEREAS, the By-Laws of the
Corporation require the Corporation to indemnify and advance
expenses to its directors and officers to the full extent permitted
by law and the Indemnitee has agreed to serve as a director or
officer of the Corporation in part in reliance on such
By-Laws;
WHEREAS, the Corporation, after
reasonable investigation, has determined that the liability
insurance coverage presently available to the Corporation may be
inadequate in certain circumstances to cover all possible exposure
for which Indemnitee should be protected, in the judgment of the
Corporation, and the Corporation is of the opinion that the best
interests of the Corporation and its stockholders would best be
served by a combination of insurance and indemnification from the
Corporation;
WHEREAS, in recognition of
Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service
to the Corporation in an effective manner and Indemnitee’s
reliance on the aforesaid By-Laws, and in part to provide
Indemnitee with specific contractual assurance that the protection
promised by such By-Laws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation
of such By-Laws or any change in the composition of the
Corporation’s Board of Directors or acquisition transaction
relating to the Corporation), the Corporation wishes to provide in
this Agreement for the indemnification of and the advancing of
expenses to Indemnitee to the full extent (whether partial or
complete) permitted by law and as set forth in this Agreement, and,
to the extent insurance is maintained, for the continued coverage
of Indemnitee under the Corporation’s directors’ and
officers’ liability insurance policies;
NOW, THEREFORE, in consideration of
the premises set forth above, and the mutual covenants and
agreement set forth below, and of Indemnitee continuing to serve
the Corporation as a director or officer, and intending to be
legally bound hereby, the parties hereto agree as
follows:
1.
Certain Definitions
:
(a)
Change in Control
: shall be deemed to have occurred
if (i) any “person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the
Corporation or a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation, is or
becomes the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the total
voting power represented by the Corporation’s then
outstanding Voting Securities, or (ii) during any period of
two consecutive years, individuals who at the
beginning of such period constitute
the Board of Directors of the Corporation and any new director
whose election by the Board of Directors or nomination for election
by the Corporation’s stockholders was approved by a vote of
at least two-thirds (2/3) 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 a majority thereof, or
(iii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other entity, other than
a merger or consolidation which would result in the Voting
Securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at
least 80% of the total voting power represented by the Voting
Securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders
of the Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the
Corporation (in one transaction or a series of transactions) of all
or substantially all of the Corporation’s assets.
(b)
Corporate Capacity
: shall mean Indemnitee’s
status or capacity as, or fact that Indemnitee is or was, a
director, officer, employee, agent or fiduciary of the Corporation,
or is or was serving at the request of the Corporation as a
director, officer, employee, trustee, agent or fiduciary of another
Entity.
(c)
Entity : shall mean a corporation, partnership, limited
liability company, joint venture, employee benefit plan, trust or
other enterprise. References herein to a director of an
Entity shall include, in the case of any Entity that is not managed
by a board of directors, such other position, such as manager or
trustee or member of the governing body of such Entity, that
entails responsibility for the management and direction of such
Entity’s affairs, including, without limitation, the general
partner of any partnership (general or limited) and the manager or
managing member of any limited liability company.
(d)
Expenses : include attorneys’ fees and all other
costs, expenses and obligations reasonably paid or incurred in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be
a witness in or participate in any Proceeding for which indemnity
is available under Section 2(a) hereof or in connection
with seeking recovery under any directors’ and
officers’ liability insurance policies maintained by the
Corporation.
(e)
Indemnifiable Event
: any event or occurrence related to
the fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee,
trustee, agent or fiduciary of another Entity, or by reason of
anything done or not done by Indemnitee in any such
capacity.
(f)
Proceeding
: is any threatened, pending or
completed action, suit, arbitration, alternative dispute mechanism
or proceeding, or any inquiry or investigation (including an
internal investigation), whether conducted by the Corporation or
any other party, that Indemnitee in good faith believes might lead
to the institution of any such action, suit or proceeding, whether
civil, criminal, administrative, investigative or other.
(g)
Reviewing Party
: subject to Section 3 of this
Agreement, a committee or person consisting of a member or members
of the Corporation’s Board of Directors or any other person
or body appointed by the Board who is not a party to or affected by
the particular claim for which Indemnitee is seeking
indemnification. If there has not been a Change in Control,
the Reviewing Party shall be selected by the Board of Directors
(unless the Indemnitee is a director or officer of the Corporation
at the time of the determination of
2
entitlement to indemnification
contemplated by Section 3 of this Agreement, in which case the
Reviewing Party shall be determined as provided in Section 3),
and if there has been such a Change in Control, the Reviewing Party
shall be special, independent counsel selected by Indemnitee and
approved by the Corporation (which approval shall not be
unreasonably withheld), and who has not otherwise performed
services for the Corporation or Indemnitee within the last 5 years
(other than in connection with such matters). Such counsel, among
other things, shall render its written opinion to the Corporation
and Indemnitee as to whether and to what extent the Indemnitee
would be permitted to be indemnified under applicable law. The
Corporation agrees to pay the reasonable fees of such special,
independent counsel and to indemnify fully such counsel against any
and all expenses (including attorney’s fees), claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
(h)
Voting Securities
: any securities of the Corporation
which vote generally in the election of directors.
2.
Basic Indemnification
Arrangement .
(a)
In the event Indemnitee was, is or
becomes a party to or witness or other participant in, or is
threatened to be made a party to or w
