Exhibit 10.2
INDEMNIFICATION AGREEMENT
This Indemnification
Agreement (“Agreement”) made this day of ,
2007 by and between The Allstate Corporation, a Delaware corporation (the “Company”),
and
(“Indemnitee”), who is a director of the Company.
WITNESSETH:
WHEREAS,
Section 145 of the General Corporation Law of Delaware (“Section 145”) empowers
corporations to indemnify any officer, director, employee or agent, in
accordance with the provisions of Section 145, any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director, officer,
employee or agent of a corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, in accordance with the provisions of said Section, and to
pay, in advance of the final disposition of any such action, suit or
proceeding, the expenses (including attorneys’ fees) reasonably incurred by any
person, in accordance with the provisions of Section 145; and
WHEREAS,
the Company and the Indemnitee recognize that today there exists a substantial
amount of corporate litigation in general, which subjects directors, officers,
employees and agents (including fiduciaries) to expensive litigation risks; and
WHEREAS,
the Company desires to have highly competent persons serve as its directors,
and acknowledges that unless directors are provided with adequate protection
through insurance and indemnification against risks of claims and actions
against them arising out of their service to, and activities on behalf, of the
corporation highly competent persons will be less likely to serve as directors;
and
WHEREAS,
the Indemnitee, in recognition of the continuing commitment to serve, seeks
enhanced protections deemed necessary under the present circumstances, and in
contemplation of the fact that Indemnitee may not be willing to serve in such
capacity without additional protection; and
WHEREAS,
in recognition of Indemnitee’s need for (i) substantial protection against
personal liability for services rendered to the Company, (ii) specific
contractual assurance that the protection promised by the Company’s Amended and
Restated Certificate of Incorporation (the “Certificate of Incorporation”) and
Amended and Restated Bylaws (the “Bylaws”) will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of the
Certificate of Incorporation or Bylaws or any change in the composition of the
Board of Directors of the Company or acquisition transaction relating to the
Company), and (iii) an inducement to provide effective services to the Company
as a director, officer, employee, or agent (including fiduciary), the Company
wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to
Indemnitee to the fullest extent (whether partial or complete) permitted under
law and as set forth in this Agreement, and, to the extent insurance is
maintained, to provide for the continued coverage of Indemnitee under the
Company’s directors and officers liability insurance policies; and
WHEREAS,
the Board of Directors of the Company has authorized and directed the proper
officers of the Company to enter into this Agreement in the name of or on
behalf of the Company.
NOW, THEREFORE, in
consideration of the premises, the agreements herein set forth, and other good
and valuable consideration, the Company and Indemnitee hereby agree as follows:
ARTICLE I
Section 1.01 Definitions. As used in this Agreement, the following
terms have the following meanings, unless a Section of this Agreement
specifically provides otherwise:
“Agreement”
means this Indemnification Agreement and any amendments pursuant to Section
7.01 hereof.
“Agreement
Date” means the date of this Agreement as set forth above.
“Approved
Passive Holder” means, as of any date, any Person that satisfies all of the
following conditions:
(a) as of such date, such Person is a 20%
Owner, but is the Beneficial Owner of less than 30% of the then-outstanding
common stock and of Voting Securities representing less than 30% of the
combined voting power of all then-outstanding Voting Securities of the Company;
(b) prior to becoming a 20% Owner, such
Person has filed, and as of such date has not withdrawn, or made any subsequent
regulatory or judicial filing or public statement or announcement that is
inconsistent with, a statement with the SEC pursuant to Section 13(g) of the
Exchange Act that includes a certification by such Person to the effect that
such beneficial ownership does not have the purpose or effect of changing or
influencing the control of the Company;
(c) prior to such Person’s becoming a 20%
Owner, at least two-thirds of the Company Incumbent Directors (such Company
Incumbent Directors to be determined as of such date using the Agreement Date
as the baseline date) shall have voted in favor of a resolution adopted by the
Board to the effect that:
(i) the
terms and conditions of such Person’s investment in the Company will not have
the effect of changing or influencing the control of the Company, and
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(ii) notwithstanding
clause (a) of the definition of “Change of Control,” such Person’s becoming a
20% Owner shall be treated as though it were a Merger of Equals for purposes of
this Agreement.
“Beneficial
Owner” means such term as defined in Rule 13d-3 of the SEC under the
Exchange Act.
“Board”
means the Board of Directors of the Company.
“CEO”
means Chief Executive Officer of the Company.
“Change of
Control” means, except as otherwise provided at the end of this subsection,
the occurrence of any one or more of the following:
(a) any person (as such term is used in
Rule 13d-5 promulgated by the SEC under the Exchange Act) or group (as such
term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other
than a subsidiary or any employee benefit plan (or any related trust) of the
Company or any of its subsidiaries, becomes the beneficial owner, as such term
is defined in Rule 13d-3 promulgated by the SEC under the Exchange Act, of 20%
or more of the common stock of the Company or of Voting Securities representing
20% or more of the combined voting power of all Voting Securities of the
Company (such a person or group that is not a Similarly Owned Company (as
defined below), a “20% Owner”), except that no Change of Control shall be
deemed to have occurred solely by reason of such beneficial ownership by a
corporation (a “Similarly Owned Company”) with respect to which both more than
70% of the common stock of such corporation and Voting Securities representing
more than 70% of the combined voting power of the Voting Securities of such
corporation are then owned, directly or indirectly, by the persons who were the
direct or indirect owners of the common stock and Voting Securities of the
Company immediately before such acquisition in substantially the same
proportions as their ownership, immediately before such acquisition, of the
common stock and Voting Securities of the Company, as the case may be; or
(b) the Company Incumbent Directors
(determined using the Agreement Date as the baseline date) cease for any reason
to constitute at least two-thirds of the directors of the Company then serving
(provided that this clause (b) shall be inapplicable during a Post-Merger of
Equals Period); or
(c) approval by the stockholders of the
Company of a merger, reorganization, consolidation, or similar transaction, or
a plan or agreement for the sale or other disposition of all or substantially
all of the consolidated assets of the Company or a plan of liquidation of the
Company (any of the foregoing, a “Reorganization Transaction”) that, based on
information included in the proxy and other written materials distributed to
the Company’s stockholders in connection with the solicitation by the Company
of such stockholder approval, is not expected to qualify as an Exempt
Reorganization Transaction; provided, however, that if (i) the merger or other
agreement between the parties to a Reorganization Transaction expires or is
terminated after the date of such
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stockholder
approval but prior to the consummation of such Reorganization Transaction (a “Reorganization
Transaction Termination”) or (ii) immediately after the consummation of the
Reorganization Transaction, such Reorganization Transaction does qualify as an
Exempt Reorganization Transaction notwithstanding the fact that it was not
expected to so qualify as of the date of such stockholder approval, then such
stockholder approval shall not be deemed a Change of Control for purposes of
any Termination of Employment as to which the Termination Date occurs on or
after the date of the Reorganization Transaction Termination or the date of the
consummation of the Exempt Reorganization Transaction, as applicable; or
(d) the consummation by the Company of a
Reorganization Transaction that for any reason fails to qualify as an Exempt
Reorganization Transaction as of the date of such consummation, notwithstanding
the fact that such Reorganization Transaction was expected to so qualify as of
the date of such stockholder approval; or
(e) a 20% Owner who had qualified as an
Approved Passive Holder ceases to qualify as such for any reason other than
ceasing to be a 20% Owner (such cessation of Approved Passive Holder status to
be considered for all purposes of this Agreement (including the definition of “Effective
Date”) a Change of Control distinct from and in addition to the Change of
Control specified in clause (a) above).
(f) Notwithstanding the occurrence of
any of the foregoing events, a Change of Control shall not occur with respect
to Indemnitee if, in advance of such event, Indemnitee agrees in writing that
such event shall not constitute a Change of Control.
“Company
Incumbent Directors” means, determined as of any date by reference to any
baseline date:
(a) the members of the Board of Directors
of the Company on the date of such determination who have been members of the
Board of Directors of the Company since such baseline date, and
(b) the members of the Board of Directors
of the Company on the date of such determination who were appointed or elected
after such baseline date and whose election, or nomination for election by
stockholders of the Company or the Surviving Corporation, as applicable, was
approved by a vote or written consent of two-thirds (100% for purposes of
paragraph (a) of the definition of “Merger of Equals”) of the directors
comprising the Company Incumbent Directors on the date of such vote or written
consent, but excluding any such member whose initial assumption of office was
in connection with (i) an actual or threatened election contest, including a
consent solicitation, relating to the election or removal of one or more members
of the Board of Directors of the Company, (ii) a “tender offer” (as such term
is used in Section 14(d) of the Exchange Act), (iii) a proposed Reorganization
Transaction, or (iv) a request, nomination or suggestion of any Beneficial
Owner of Voting Securities representing 15% or more of the aggregate voting
power of the Voting Securities of the Company or the Surviving Corporation, as
applicable.
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“Consummation
Date” means the date on which a Reorganization Transaction is consummated.
“Disinterested
Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification or advancement of Expenses
is sought by Indemnitee or Indemnitee’s Spouse, and who will not be materially
affected, either to his benefit or detriment in a manner not shared by the
Company and stockholders by a decision rendered in the Proceeding and who is
free from the influence of other interested persons.
“Effective
Date” means the date on which a Change of Control first occurs.
“Exchange
Act” means the Securities Exchange Act of 1934.
“Exempt
Reorganization Transaction” means a Reorganization Transaction that results
in the Persons who were the direct or indirect owners of the outstanding common
stock and Voting Securities of the Company immediately before such
Reorganization Transaction becoming, immediately after the consummation of such
Reorganization Transaction, the direct or indirect owners of both more than 70%
of the then-outstanding common stock of the Surviving Corporation and Voting
Securities representing more than 70% of the combined voting power of the
then-outstanding Voting Securities of the Surviving Corporation, in
substantially the same respective proportions as such Persons’ ownership of the
common stock and Voting Securities of the Company immediately before such
Reorganization Transaction.
“Expenses”
means any and all costs and fees incurred in connection with any Proceeding
including, without limitation, costs and fees reasonably incurred by counsel,
consultants and experts, including all costs and fees reasonably incurred in
connection with the enforcement of this Agreement.
“Independent
Counsel” means the law firm or member(s) of a law firm retained to fulfill
the duties contained in and otherwise comply with the requirements of Article V
as an independent decision maker who shall not owe a fiduciary responsibility
to, or have any attorney-client relationship with, either the Company,
Indemnitee, or Indemnitee’s Spouse with respect to the matter for which the law
firm or member(s) have been retained as Independent Counsel. This Agreement is not intended to and does
not supersede any obligations incumbent upon Independent Counsel pursuant to
applicable standards of professional conduct.
“Liabilities”
means all judgments, fines (including any excise taxes assessed with respect to
any employee benefit plan), penalties and amounts paid in settlement and other
liabilities (including all interest, assessments and other charges paid or
payable in connection with or in respect of any such amounts) arising out of or
in connection with any Proceeding; provided that Liabilities shall not include
any Expenses.
“Merger of
Equals” means, as of any date, a transaction that, notwithstanding the fact
that such transaction may also qualify as a Change of Control, satisfies all of
the conditions set forth in paragraphs (a) or (b) below:
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(a) If such date is on or after the
Consummation Date, a Reorganization Transaction in respect of which all of the
following conditions are satisfied as of such date, or, if such date is prior
to the Consummation Date, a proposed Reorganization Transaction in respect of
which the merger agreement or other documents (including the exhibits and
annexes thereto) setting forth the terms and conditions of such Reorganization
Transaction, as in effect on such date after giving effect to all amendments
thereof or waivers thereunder, require that the following conditions be
satisfied on and, where applicable, after the Consummation Date:
(i) at
least 50%, but not more than 70%, of the common stock of the Surviving
Corporation outstanding immediately after the consummation of the
Reorganization Transaction, together with Voting Securities representing at
least 50%, but not more than 70%, of the combined voting power of all Voting
Securities of the Surviving Corporation outstanding immediately after such
consummation shall be owned, directly or indirectly, by the persons who were
the owners, directly or indirectly, of the common stock and Voting Securities
of the Company immediately before such consummation in substantially the same
proportions as their respective direct or indirect ownership, immediately
before such consummation, of the common stock and Voting Securities of the
Company, respectively; and
(ii) the
Company Incumbent Directors (determined as of such date using the date
immediately preceding the Effective Date as the baseline date) shall,
throughout the period beginning on the Effective Date and ending on the third
anniversary of the Effective Date, continue to constitute not less than 50% of
the members of the Board; and
(iii) the
person who was the CEO of the Company immediately prior to the Effective Date
shall serve as (x) the CEO of the Company throughout the period beginning on
the Effective Date and ending on the Consummation Date and (y) the CEO of the
Surviving Corporation at all times during the period commencing on the
Consummation Date and ending on the first anniversary of the Consummation Date;
provided, however, that a Reorganization Transaction that qualifies as a Merger
of Equals shall cease to qualify as a Merger of Equals (a “Merger of Equals
Cessation”) and shall instead qualify as a Change of Control that is not a
Merger of Equals from and after the first date during the Post-Change Period
(such date, the “Merger of Equals Cessation Date”) as of which any one
or more of the following shall occur for any reason:
(A) if any condition of clause (i) of
paragraph (a) of this definition shall for any reason not be satisfied as of
immediately after the consummation of the Reorganization Transaction; or
(B) if as of the close of business on any
date on or after the Effective Date, any condition of clauses (ii) or (iii) of
paragraph (a) of this definition shall not be satisfied; or
(C) if on any date prior to the first
anniversary of the Consummation Date, the Company shall make a filing with the
SEC, issue a press
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release, or make a public announcement to the
effect that the Company is seeking or intends to seek a replacement for the
CEO, whether such replacement is to become effective before or after such first
anniversary.
(b) As of such date, each Person, if any,
who is a 20% Owner qualifies as an Approved Passive Holder.
The Company shall give Indemnitee written notice of
any Merger of Equals Cessation and the applicable Merger of Equals Cessation
Date as soon as practicable after the Merger of Equals Cessation Date.
“Person”
means any individual, sole proprietorship, partnership, joint venture, limited
liability company, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity or government
instrumentality, division, agency, body or department.
“Post-Change
Period” means the period commencing on the Effective Date and ending on the
third anniversary of the Effective Date.
“Post-Merger
of Equals Period” means the period commencing on an Effective Date of a
Change of Control that qualifies as a Merger of Equals and ending on the third
anniversary of such Effective Date or, if sooner, the Merger of Equals
Cessation Date.
“Proceeding”
means any reasonably foreseeable, threatened, pending or completed action,
suit, hearing, investigation or inquiry (whether internal or external)
arbitration or other alternative dispute mechanism, or other proceeding,
whether civil, criminal, administrative, regulatory, congressional,
investigative or otherwise.
“SEC”
means the Securities and Exchange Commission.
“Spouse”
means the person with whom Indemnitee has entered into a lawful marriage, civil
union, or domestic partnership arrangement that has not been annulled,
dissolved, or otherwise invalidated or terminated under the law of the
jurisdiction in which it was entered, including “Domestic Partner” as that term
is used in the Company’s employee medical insurance program.
“Surviving
Corporation” means the corporation resulting from a Reorganization
Transaction or, if securities representing at least 50% of the aggregate voting
power of such resulting corporation are directly or indirectly owned by another
corporation, such other corporation.
“Termination
of Employment” means any termination of Indemnitee’s employment with, or
position as a director of, the Company,
whether such occurs by reason of (a) the initiative of any Company or
Indemnitee or (b) the death of Indemnitee.
“To The
Fullest Extent Authorized By Law” means (i) to the fullest extent permitted
by the General Corporation Law of Delaware as in effect on the date of this
Agreement and as interpreted by the courts of Delaware, and (ii) to the fullest
extent
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authorized or
permitted by any interpretations of, amendments to or replacements of the
General Corporation Law of Delaware adopted or announced after the date of this
Agreement that increases the extent to which a corporation may provide indemnification.
“Voting
Securities” of a corporation means securities of such corporation that are
entitled to vote generally in the election of directors of such corporation.
ARTICLE II
Section 2.01 Services by Indemnitee. Indemnitee hereby agrees to serve or continue
to serve the Company, for so long as Indemnitee is duly elected or appointed or
until Indemnitee tenders his resignation, is removed, or dies.
ARTICLE III
Section 3.01 Indemnification Generally. The
Company shall indemnify Indemnitee and Indemnitee’s Spouse who is or was made a
party or a witness or other participant in or is or was threatened to be made a
party or a witness or other participant in any Proceeding, by reason of the
fact that the Indemnitee was or may be deemed a director, officer, employee or
agent of the Company or is or was or may be deemed serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, or other enterprise against any and all
Expenses and Liabilities actually and reasonably incurred To The Fullest Extent
Authorized By Law, provided that, Indemnitee
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Company, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his, her or its conduct was
unlawful.
Section 3.02 Successful Defense; Partial Success. The Company shall indemnify Indemnitee and
Indemnitee’s Spouse against any and all Expenses actually and reasonably
incurred to the extent that such person has been successful on the merits or
otherwise in the defense of any Proceeding referred to in Article III, Section
3.01. A dismissal with or without
prejudice shall be deemed a success in a Proceeding. Where Indemnitee or Indemnitee’s Spouse is
successful in defending against some, but not all, claims, issues or matters,
the Company shall indemnify such person against any and all Expenses reasonably
incurred in the defense of the claims, issues and matters that were
successfully defended.
Section 3.03 Failure to Act. If a determination as to Indemnitee’s or
Indemnitee’s Spouse’s entitlement to indemnification shall not have been made
pursuant to this Agreement within 60 days after the final disposition of the
matter that is the subject of the request for indemnification, the requisite
determination of entitlement to indemnification shall be deemed to have been
made in favor of Indemnitee or Indemnitee’s Spouse, and Indemnitee or
Indemnitee’s Spouse, as the case may be, shall be entitled to such
indemnification provided that such 60-day period may be extended for a
reasonable time, not to exceed an additional 30 days, if the person or persons
making the determination in good faith requires such additional time to obtain
or evaluate any documentation or information relating thereto.
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