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Exhibit 10.4
OFFICERS' AND DIRECTORS'
INDEMNIFICATION AGREEMENT
This
Indemnification Agreement ("Agreement") is made as of _________,
____
by and among Loral Space &
Communications Inc., a Delaware corporation (the
"Company"), those subsidiaries of the
Company signatories hereto solely for
purpose of Section 20 of this Agreement and
__________________ ("Indemnitee").
RECITALS
WHEREAS,
officers and directors of publicly held corporations are
increasingly exposed, in carrying out their
duties and responsibilities on
behalf and for the benefit of such
corporations, to claims and other actions
against them and are reluctant to serve
unless they are provided with adequate
protection through insurance and/or
indemnification against the risks of such
claims being asserted against them arising
out of their service to and
activities on behalf of such corporations;
and
WHEREAS, the
Board of Directors of the Company (the "Board") has determined
that the increased difficulty in attracting
and retaining such persons is
detrimental to the best interests of the
Company's stockholders and that the
Company should act to assure such persons
that there will be increased certainty
of such protection in the future; and
WHEREAS, the
Board has determined that, in order to help attract and retain
qualified individuals as officers and
directors and in other capacities, the
best interests of the Company and its
stockholders will be served by attempting
to maintain, on an ongoing basis, at the
Company's sole expense, insurance to
protect persons serving the Company and its
subsidiaries as officers and
directors and in other capacities from
certain liabilities. Although the
furnishing of such insurance has been a
customary and widespread practice among
United States-based corporations and other
business enterprises for many years,
the Company believes that, given current
market conditions and trends, such
insurance may be available to it in the
future only at higher premiums and with
more exclusions. At the same time,
directors, officers and other persons in
service to corporations or business
enterprises are being increasingly subjected
to expensive and time-consuming litigation;
and
WHEREAS, the
Board has determined that, in order to help attract and retain
qualified individuals as officers and
directors and in other capacities, the
best interests of the Company and its
stockholders will be served by assuring
such individuals that the Company will
indemnify them to the maximum extent
permitted by law; and
WHEREAS, the
Amended and Restated Certificate of Incorporation as in effect
on the date hereof (the "Certificate of
Incorporation") of the Company requires,
in certain circumstances described therein,
and in other circumstances permits,
but does not obligate the Company to
provide for, the indemnification of the
officers and directors of the Company,
subject to certain limitations contained
therein, and Indemnitee may also
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be entitled to indemnification pursuant to
the Delaware General Corporation Law
("DGCL"); and
WHEREAS, the
Certificate of Incorporation and the DGCL 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, officers and other
persons with respect to indemnification
and the advancement of defense costs;
and
WHEREAS, it
therefore is reasonable, prudent and necessary for the Company
contractually to obligate itself to
indemnify, and to advance defense costs on
behalf of, the Indemnitee to the extent,
and only to the extent, provided herein
so that he or she will serve or continue to
serve the Company free from undue
concern that he or she will not be so
indemnified; and
WHEREAS, this
Agreement is a supplement to and in furtherance of the
Certificate of Incorporation and any
resolutions of the Board adopted pursuant
thereto, and shall not be deemed a
substitute therefore, nor shall it be deemed
to diminish or abrogate any rights of
Indemnitee thereunder; provided, however,
that this Agreement shall be construed in
accordance and consistent with, and in
the event of any conflict be superseded by,
and in no way creates or be used to
create indemnification obligations of the
Company which are inconsistent with,
Section 8 of this Agreement and Article VII
of the Certificate of Incorporation;
and
WHEREAS,
Indemnitee is willing to serve, and continue to serve, and take
on
additional service as an officer and/or in
such other capacities on the
condition that he or she be indemnified as
provided for herein.
NOW, THEREFORE,
in consideration of the premises and the covenants
contained herein, the Company and
Indemnitee do hereby covenant and agree as
follows:
1. SERVICES TO
THE COMPANY. Indemnitee will serve or continue to serve, at
the will of the Company, as an officer,
director or key employee of the Company
for so long as Indemnitee is duly elected
or appointed or until Indemnitee
tenders his or her resignation.
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) Any Person (excluding any employee benefit plan of the
Company) is or becomes the Beneficial
Owner, directly or indirectly, of
securities of the Company representing
fifty percent (50%) or more of the
combined voting power of the Company's
outstanding securities then entitled
ordinarily to vote for the election of
directors; or
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(ii) During any period of two (2) consecutive years commencing
on
or after the effective date of a plan or
reorganization with respect to the
Company and approved by the United States
Bankruptcy Court ("Effective Date"),
the individuals who at the beginning of
such period constitute the Board or any
individuals who would be Continuing
Directors (as defined below) cease for any
reason to constitute at least a majority
thereof; or
(iii) The Board shall approve a sale of all or substantially
all
of the assets of the Company; or
(iv) The Board shall approve any merger, consolidation, or like
business combination or reorganization of
the Company, the consummation of which
would result in the occurrence of any event
described in clause (i) or (ii),
above.
Notwithstanding
the foregoing, none of the events or circumstances
described in clauses (i) through (iv) above
shall be deemed to result in a
Change in Control if such event or
circumstance results in any stockholder,
together with its affiliates, which
beneficially owns 30% or more of the
outstanding common stock of the Company as
of the Effective Date or any
affiliates of such stockholder increasing
its equity interests in the Company,
acquiring all or substantially all of the
assets of the Company or increasing
its representation on the Board.
(b) "Continuing Directors" shall mean the original members of
the
Board pursuant to the Plan and any
successor to any such director and any
additional director who after the Effective
Date was nominated or selected by a
majority of the Continuing Directors in
office at the time of his or her
nomination or selection.
(c) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as
amended.
(d) "Person" shall have the meaning set forth in Sections 13(d)
and
14(d) of the Exchange Act; provided,
however, that Person shall exclude (i) the
Company and (ii) any trustee or other
fiduciary holding securities under an
employee benefit plan of the Company.
(e) "Beneficial Owner" shall have the meaning given to such term
in
Rule 13d-3 issued under the Exchange Act;
provided, however, that Beneficial
Owner shall exclude any Person becoming a
Beneficial Owner by reason of the
stockholders of the Company approving a
merger of the Company with another
entity.
(f) "Corporate Status" shall describe the status of a Person who is
or
was a director, officer, trustee, partner,
member, fiduciary, employee or agent
of the Company or of any other Enterprise
(as defined below), which such Person
is or was serving at the request of the
Company.
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(g) "Disinterested Director" shall mean a member of the Board who
is
not and was not a party to the Proceeding
(as defined below) in respect of which
indemnification is sought by
Indemnitee.
(h) "Enterprise" shall mean any 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, trustee, partner,
member, fiduciary, employee or agent.
(i) "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 and amounts 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 (as defined
below). Expenses also shall include costs
incurred in connection with any appeal
resulting from any Proceeding (as defined
below), including, without limitation,
the premium, security for, and other costs
relating to any bond, supersedeas
bond, or other appeal bond or its
equivalent. Expenses, however, shall not
include (i) amounts paid in settlement by
Indemnitee or the amount of judgments
or fines against Indemnitee and (ii) except
as expressly provided in Section
8(b), any amount payable by Indemnitee in
connection with or related to
Proceedings in connection with events
occurring before the Bankruptcy Filing or
that relate to or are in connection with
Old Loral.
(j) References to "fines" shall include any excise tax assessed on
a
person with respect to any employee benefit
plan pursuant to applicable law.
(k) References to "serving at the request of the Company" shall
include, without limitation, any service
provided at the request of the Company
as a director, officer, trustee, partner,
member, fiduciary, employee or agent
of the Company and any duties or services
by such director, officer, trustee,
partner, member, fiduciary, employee or
agent with respect to an employee
benefit plan or its participants and
beneficiaries.
(l) Any action taken or omitted to be taken by a person for a
purpose
which he or she reasonably believed to be
in the interests of the Company or an
employee benefit plan or its participants
and beneficiaries shall, without
limitation, be deemed to have been taken in
"good faith" and for a purpose which
is "not opposed to the best interests of
the Company", as such terms are
referred to in this Agreement and used in
the DGCL.
(m) The term "Proceeding" shall include any threatened, pending
or
completed, in each case commenced after the
Bankruptcy Filing (except as
expressly provided in Section 8(b)),
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
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whether of a civil, criminal,
administrative or investigative nature, including
any related appeal, in which Indemnitee
was, is or will be involved as a party
or witness or otherwise by reason of the
fact that Indemnitee is or was a
director, officer, trustee, partner,
member, fiduciary, employee or agent of the
Company, by reason of any action taken or
not taken by him or her while acting
as director, officer, trustee, partner,
member, fiduciary, employee or agent of
the Company, or by reason of the fact that
he or she is or was serving at the
request of the Company as a director,
officer, trustee, partner, member,
fiduciary, employee or agent of any 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.
(n) "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 (5) 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.
3. INDEMNITY IN
THIRD-PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee in accordance with the
provisions of this Section 3 if Indemnitee is
made, or is threatened to be made, a party
to or a participant in (as a witness
or otherwise) any Proceeding, other than 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 against all
judgments, fines, penalties, amounts
paid in settlement (if such settlement is
approved in writing in advance by the
Company, which approval shall not be
unreasonably withheld) (including, without
limitation, all interest, assessments and
other charges paid or payable in
connection with or in respect of any of the
foregoing) (collectively, "Losses")
and Expenses actually and reasonably
incurred by Indemnitee or on his or her
behalf in connection with such Proceeding
or any action, discovery event, claim,
issue or matter therein or related thereto,
if Indemnitee acted in good faith,
for a purpose which he or she reasonably
believed to be in or not opposed to the
best interests of the Company and, in the
case of a criminal Proceeding, in
addition, had no reasonable cause to
believe that his or her conduct was
unlawful.
4. INDEMNITY IN
PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company
shall indemnify Indemnitee in accordance
with the provisions of this Section 4
if Indemnitee is made, or is threatened to
be made, a party to or a participant
in (as a witness or otherwise) any
Proceeding by or in the right of the Company
to procure a judgment in its favor.
Pursuant to this Section 4, Indemnitee shall
be indemnified against all Expenses
actually and reasonably incurred by him or
her or on his or her behalf in connection
with the defense or settlement of such
Proceeding or any action, discovery
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event, claim, issue or matter therein or
related thereto, if Indemnitee acted in
good faith, for a purpose which he or she
reasonably believed to be in or not
opposed to the best interests of the
Company. No indemnification, however, shall
be made under this Section 4 in respect of
any claim, issue or matter as to
which Indemnitee shall have been adjudged
to be liable to the Company, unless
and only to the extent that the court in
which the Proceeding was brought or, if
no Proceeding was brought in a court, any
court of competent jurisdiction,
determines upon application that, in view
of all the circumstances of the case,
Indemnitee fairly and reasonably is
entitled to indemnification for such portion
of the Expenses as the court deems
proper.
5.
INDEMNIFICATION FOR EXPENSES WHERE INDEMNITEE IS WHOLLY OR
PARTLY
SUCCESSFUL. Notwithstanding and in addition
to any other provisions of this
Agreement, to the extent that Indemnitee is
a party to a Proceeding and is
successful, on the merits or otherwise, in
the defense of any claim, issue or
matter therein, the Company shall indemnify
Indemnitee against all Expenses
actually and reasonably incurred by him or
her or on his or her behalf in
connection with such successful defense.
For the avoidance of doubt, 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 indemnify Indemnitee against all
Expenses actually and reasonably incurred
by him or her or on his or her behalf
in connection with each successfully
resolved claim, issue or matter. For
purposes of this Section 5 and, without
limitation, the termination of any
claim, issue or matter in such a Proceeding
by withdrawal or dismissal, with or
without prejudice, shall be deemed to be a
successful result as to such claim,
issue or matter.
6. INDEMNIFICATION FOR EXPENSES OF
A WITNESS. Notwithstanding and in
addition to any other provision of this
Agreement, to the extent that Indemnitee
is, by reason of his or her Corporate
Status, a witness in or otherwise incurs
Expenses in connection with any Proceeding
to which Indemnitee is not a party,
he or she shall be indemnified against all
Expenses actually and reasonably
incurred by him or her or on his or her
behalf in connection therewith.
7. ADDITIONAL
INDEMNIFICATION.
(a) Notwithstanding any limitation in Sections 3, 4, or 5 hereof,
but
subject to Article VII of the Certificate
of Incorporation and Section 8 hereof,
the Company shall indemnify Indemnitee to
the fullest extent permitted by law
and Article VII of the Certificate of
Incorporation, if Indemnitee is made, or
is threatened to be made, a party to any
Proceeding (including a Proceeding by
or in the right of the Company to procure a
judgment in its favor) against all
Losses and Expenses actually and reasonably
incurred by Indemnitee in connection
with the Proceeding. No indemnification
shall be made under this Section 7(a) on
account of Indemnitee's conduct which
constitutes a breach of Indemnitee's duty
of loyalty to the Company or its
stockholders or is an act or omission not in
good faith or which involves intentional
misconduct or a knowing violation of
the law.
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(b) For purposes of Section 7(a), the meaning of the phrase "to
the
fullest extent permitted by law" shall
include, but not be limited to:
i. to the fullest extent authorized or permitted by the
then-applicable provisions of the DGCL that
authorize or contemplate
indemnification by agreement, or the
corresponding provision of any amendment to
or replacement of the DGCL, and
ii. to the fullest extent authorized or permitted by any
amendments to or replacements of the DGCL
adopted after the date of this
Agreement that increase the extent to which
a corporation may indemnify its
officers and directors.
(c) Indemnitee shall be entitled to the prompt payment of all
Expenses
reasonably incurred in enforcing
successfully (fully or partially) this
Agreement.
8.
EXCLUSIONS.
(a) Notwithstanding any provision in this Agreement, the Company
shall
not be obligated under this Agreement to
make any indemnity, including for
Expenses, in connection with any Proceeding
against Indemnitee:
(i) for which payment actually has been received by or on
behalf
of Indemnitee under any insurance policy or
other indemnity provision, except
with respect to any excess beyond the
amount actually received under such
insurance policy or other indemnity
provision; or
(ii) for an accounting of profits made from the purchase and
sale
(or sale and purchase) by Indemnitee or any
member of the Indemnitee's immediate
family of securities of the Company within
the meaning of Section 16(b) of the
Exchange Act, as amended, or similar
provisions of state blue sky law, state
statutory law or common law; or
(iii) based upon or attributable to the Indemnitee or any
member
of the Indemnitee's immediate family
gaining in fact any personal profit or
advantage to which the Indemnitee was not
legally entitled; provided that the
Indemnitee shall be protected under this
Agreement as to any claims upon which
suit may be brought against Indemnitee by
reason of any alleged personal profit
or advantage to which the Indemnitee was
not legally entitled, unless a final
and non-appealable adjudication thereof
adverse to the Indemnitee by a court of
competent jurisdiction shall establish that
Indemnitee committed act(s) of
personal profit or advantage to which the
Indemnitee was not legally entitled;
or
(iv)
prior to a Change in Control, 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 against
the Company (other than any Proceeding
referred to in Sections 13(d) or (e)
below or any other
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Proceeding commenced to recover any
Expenses referred to in Section 7(c) above)
or its directors, officers, employees or
other indemnitees, unless (i) the Board
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;
or
(v)
if the funds at issue were paid pursuant to a settlement
approved by a court and indemnification
would be inconsistent with any condition
with respect to indemnification expressly
imposed by the court in approving the
settlement; or
(vi) based upon or
attributable to the fraud, willful misconduct
or dishonesty of the Indemnitee seeking
payment hereunder; provided that the
Indemnitee shall be protected under this
Agreement as to any claims upon which
suit may be brought against Indemnitee by
reason of any alleged fraud, willful
misconduct or dishonesty on Indemnitee's
part, unless a final and non-appealable
adjudication thereof adverse to the
Indemnitee by a court of competent
jurisdiction shall establish that
Indemnitee committed fraud, willful misconduct
or act(s) of active and deliberate
dishonesty, with actual dishonest purpose and
intent, which act(s) were material to the
cause of action so adjudicated; or
(vii) for bodily injury, sickness, disease or death of any
person, or damage to or destruction of any
tangible property, including loss of
use thereof, not in connection with
performance of employment; or
(viii) for which indemnification under this Agreement is
determined by a final and non-appealable
adjudication of a court of competent
jurisdiction to be unlawful and violative
of public policy.
(b) Notwithstanding anything to the contrary set forth in or
relied
upon by the Indemnitee in connection with
this Agreement,
(i) for the purposes of this Agreement, the term "Company" and
"Enterprise" shall specifically exclude
Loral Space & Communications Ltd., a
Bermuda corporation, or any direct or
indirect subsidiary thereof that at the
time was not or that is not a direct or
indirect subsidiary of the Company
(collectively, "Old Loral"), and the
Company shall not have any obligations
pursuant to this Agreement by virtue of any
assertion by any person, entity or
governmental authority or any determination
of a court of competent
jurisdiction, that it is a successor to Old
Loral or any other entity;
(ii) unless the Company expressly and unequivocably agrees
hereafter in writing otherwise, the Company
shall not be obligated and shall not
otherwise be required to indemnify the
Indemnitee for any Losses or Expenses or
otherwise incurred in his or her capacity
as a director or officer of Old Loral,
or for serving, or having agreed to serve
or allegedly to having served, at the
request of or to further the interests of
Old Loral as a director, officer,
trustee, appointee, designee, employee,
manager, partner, or agent of or in any
other capacity with another corporation
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or any limited liability company,
partnership, joint venture, trust or other
enterprise, including any employee benefit
plan of Old Loral or of any of its
affiliates and any charitable or
not-for-profit enterprise, except as
specifically set forth in that certain
Fourth Amended Joint Plan of
Reorganization Under Chapter 11 of the
Bankruptcy Code, dated as of June 3, 2005
of Loral Space & Communications Ltd.
and its subsidiaries that are a party
thereto (as the same may be amended from
time to time, the "Plan");
(iii) unless the Company expressly and unequivocably agrees
hereafter in writing otherwise, the Company
shall not be obligated and shall not
otherwise be required to in
