Document:

Exhibit 10.2

 

EXHIBIT “A”

 

INDEMNIFICATION AGREEMENT

 

This Agreement (the “Indemnification Agreement”) is made as of the 31st day of May, 2013 by and between Gleacher & Company, Inc. (the “Company”), and Christopher J. Kearns (“Kearns”) and Capstone Advisory Group, LLC (together with its subsidiary, Capstone Management Services, LLC, and its other subsidiaries, “Capstone”).  Kearns, Capstone, and their respective agents, members, officers, employees, contractors, representatives and affiliates are referred to herein as the “Indemnitees”.

 

Under the retention/engagement letter to which this Indemnification Agreement is appended (the “Engagement Agreement”), the Company has retained the services of Capstone and Capstone’s agents, members, officers, employees, contractors, representatives and affiliates (collectively, the “Capstone Personnel”), and the Company may appoint Kearns as the Chief Restructuring Officer (“CRO”) of the Company.  The Bylaws of the Company (the “Bylaws”) provide certain indemnification rights to officers, directors, and certain other persons under certain circumstances to the fullest extent authorized by, and subject to the conditions and (except as provided therein) procedures set forth in the Delaware General Corporation Law, as the same exists or may hereafter be amended (“Delaware Company Law”).  Delaware Company Law provides that the indemnification provisions contained therein are not exclusive, and contemplates that contracts may be entered into between the Company and its directors, officers and agents (including without limitation a CRO), with respect to indemnification of such directors, officers or agents.

 

Kearns and Capstone have indicated their concern that, regardless whether the indemnities available under the Bylaws and the Engagement Agreement are adequate to protect them and the Capstone Personnel against the risks associated with their service to the Company, Kearns and Capstone wish further assurances from the Company for the Indemnitees in this regard.  The parties acknowledge that Kearns and certain Capstone Personnel will continue to be agents, members, officers, employees, contractors, representatives or affiliates of Capstone, which may also be engaged as an agent of the Company.  However the parties also recognize that services as an officer of the Company may be recharacterized from time to time as services as an agent of the Company and it is necessary to protect the CRO and Capstone Personnel, as individuals, and Capstone for liabilities relating to such recharacterized services.  In order to induce Kearns and Capstone to agree to serve as an officer or agent, respectively, and in consideration of Kearns’ and Capstone’s service after the date hereof, the parties hereby agree as follows:

 

1.                                      (a)                                 If Kearns, Capstone or any of the other Indemnitees are, or are threatened to be made, a party to or participant in any action, suit, alternative dispute resolution process, or proceeding, whether civil, criminal, administrative or investigative, including without limitation pre-proceeding investigations and discovery (the “proceeding”), by reason of the fact that such Indemnitee is or was a director, officer, employee or agent of the Company or 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, including service with respect to 

 

 

employee benefit plans, the Company shall indemnify and hold harmless the Indemnitees to the fullest extent authorized by the Delaware Company Law against all costs, expenses, liabilities, judgments and losses (including without limitation reasonable attorneys’ fees, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended) and amounts paid or to be paid in settlement of any proceeding, actually and reasonably incurred or suffered by the Indemnitees in connection therewith.

 

(b)                                 (i)                                     Prior to execution of this Indemnification Agreement, the Company furnished to the Indemnitees a true, correct and complete copy of the Directors, Officers and Corporate Liability Insurance Policy (the “Policy”) issued to the Company by its insurers (collectively, the “Insurer”).  The Company represents that the Policy is in full force and effect and that, to the best of the Company’s knowledge, no event has occurred that constitutes or, with the passage of time or notice would constitute, an event of default thereunder or that would otherwise give the Insurer any right to cancel the Policy, and there are no pending claims which have been made against the Policy.  Promptly following the execution of this Indemnification Agreement the Company shall notify the Insurer of the appointment of the CRO or any Capstone Personnel as CRO or as another officer of the Company.

 

(ii)                                  The Company shall cause its insurance broker to send copies of all documentation constituting the Policy and any renewal or cancellation thereof, to the attention of Kearns at Capstone Advisory Group LLC, 104 West 40th Street, 16th floor, New York, New York 10018.

 

(iii)                               The Company shall maintain directors and officer’s liability insurance coverage covering each director, officer, employee or agent comparable as to terms and amounts as that provided under the Policy for persons in such roles as long as (A) Kearns or any of the Capstone Personnel serves as CRO or as a director, officer, employee or agent of the Company or (B) Capstone is engaged by the Company, whichever is longer, provided that, the total limits of liability purchased under any renewals of the Policy or renewal of the insurance program are commercially reasonable as determined by a majority of the then-existing board of directors of the Company, and the Company uses commercially reasonable efforts to ensure that Indemnitees are covered to the same extent as other individual insureds under such renewal policy in comparable roles.

 

(iv)                              The Company shall use commercially reasonable efforts to obtain, as applicable, written confirmation for coverage under the Policy, or an endorsement of the Policy to provide coverage for each of Kearns and any of the Capstone Personnel who serve as a director, officer, employee or agent of the Company on the same terms as any other director, officer, employee or agent of the Company covered under such Policy.  For the avoidance of doubt, it is understood and agreed that the Parties will not deem the payment of any additional premium to secure such coverage or endorsements under the preceding clauses (I) and (II) respecting Kearns or any of the Capstone Personnel who serve as CRO or as a director, officer, employee or agent of the Company to be within the scope of “commercially reasonable efforts.”

 

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(v)                                 Upon any cancellation or non-renewal of the Policy (or substitution for the Policy), the Company shall promptly notify the CRO and Capstone.  (vi)   For a period of at least one year after Kearns or Capstone ceases to serve as a director, officer, employee or agent of the Company, whichever is later, the Company shall use commercially reasonable efforts to either (A) maintain directors and officer’s liability insurance coverage covering former directors, officers, employees and agents (including the CRO and applicable Capstone Personnel) comparable to the foregoing as to terms and amounts as that provided under the Policy for persons in such roles, or (B) purchase and maintain a tail policy or other policy specifically covering the Indemnitees that is comparable as to terms and amounts.  Any coverage and policies required to be maintained by the Company under this Section 1(b) shall be obtained from an insurer with a Financial Strength Rating from A.M. Best not lower than B+ (Good).

 

2.                                      The Company shall (within 30 days of written request made by the Indemnitees) pay to the Indemnitees all reasonable costs and expenses (including, but not limited to, reasonable attorneys, accountants, investment or other advisor and expert witness fees) actually and reasonably incurred by the Indemnitees in defending any such proceeding in advance of its final disposition if the Indemnitees acted in good faith and in a manner they 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 their conduct was unlawful; provided that (i) each of Kearns and Capstone hereby agrees (which agreement shall be self-executing through acceptance of payment) to reimburse the Company for all costs and expenses advanced by the Company in defending any proceeding against Kearns or Capstone, respectively, in the event and only to the extent that it shall ultimately be determined by a court of competent jurisdiction that such person was not entitled to be indemnified by the Company for such expenses under the provisions of the Delaware Company Law, this Indemnification Agreement or otherwise at the time the costs and expenses were advanced, and (ii) each of the other Indemnitees shall agree at the time of receipt of such payment of costs or expenses (which agreement shall be self-executing through acceptance of such payment) to reimburse the Company for all costs and expenses advanced by the Company in defending any proceeding against such Indemnitee in the event and only to the extent that it shall ultimately be determined by a court of competent jurisdiction that such person was not entitled to be indemnified by the Company for such expenses under the provisions of the Delaware Company Law, this Indemnification Agreement or otherwise at the time the costs and expenses were advanced.

 

3.                                      If the Company does not respond to a written claim for any payment (including advancement of expenses) under this Indemnification Agreement within forty five (45) days of having received such a claim, it shall be deemed to have waived any right to refuse to pay such claim under this Indemnification Agreement.  In addition, if a claim under this Indemnification Agreement is not paid by the Company, or on its behalf, within forty five (45) days after a written claim has been received by the Company, the Indemnitees may at any time thereafter bring suit against the Company, and the Company shall have the burden of proving that the Indemnitees are not entitled to payment under this Indemnification Agreement.

 

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4.                                      In the event of payment to the Indemnitees under this Indemnification Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitees (and their respective successors, assigns, executors, administrators, legal representatives and heirs), who shall execute all documents and take all actions reasonably requested by the Company to implement such right of subrogation, including cooperating in the prosecution of any subrogation action in the name of Indemnitees.

 

5.                                      The Company shall not be liable under this Indemnification Agreement to make any payment to or on behalf of the Indemnitees:

 

(a)                                 for which payment is actually made to or on behalf of the Indemnitees under a valid and collectible insurance policy;

 

(b)                                 based upon liability for a claim arising from a final adjudication by a court of competent jurisdiction that the Indemnitees are liable to the Company;

 

(c)                                  on account of the Indemnitees’ conduct which is finally adjudged in a court of competent jurisdiction to have been knowingly fraudulent, deliberately dishonest, grossly negligent or willful misconduct; or if it is determined that the Indemnitee (i) did not act in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, or (ii), with respect to any criminal action or proceeding, had reasonable cause to believe his conduct was unlawful.

 

(d)                                 for which advancement or indemnification under this Indemnification Agreement is determined finally by the Delaware Court of Chancery or any court in which the proceeding was brought shall determine upon application that Indemnitee is not entitled to such advancement or indemnity.

 

6.                                      Within five business days after receipt by the Indemnitees of notice of the commencement of any proceeding, the Indemnitees will, if a claim in respect thereof is to be made against the Company under this Indemnification Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve the Company from any liability which it may have to the Indemnitees otherwise than under this Indemnification Agreement except to the extent that the Company is prejudiced by such delay.  With respect to any such action, suit or proceeding as to which the Indemnitees notify the Company of the commencement thereof;

 

(a)                                 the Company will be entitled to participate therein at its own expense;

 

(b)                                 Except as otherwise provided below, to the extent that it may wish, the Company jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitees.  After notice from the Company to the Indemnitees of its election so to assume the defense thereof, the Company will not be liable to the Indemnitees under this Indemnification Agreement for any legal or other expenses subsequently incurred by the Indemnitees in connection with the defense thereof other than reasonable costs of investigation or as 

 

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otherwise provided below.  The Indemnitees shall have the right to employ their counsel in such action, suit or proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of the Indemnitees unless (i) the employment of counsel by the Indemnitees has been authorized in writing by the Company, or (ii) the Indemnitees shall have reasonably concluded, upon the written advice of counsel, that there may be a conflict of interest between the Company and the Indemnitees in the conduct of the defense of such action or (iii) the Company shall not in fact have employed counsel reasonably satisfactory to Indemnitees to assume the defense of such action, in each of which cases the fees and expenses of counsel shall be at the expense of the Company.  The Company shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Company or as to which the Indemnitees shall have made the conclusion provided for in (ii) above; and

 

(c)                                  the Company shall not be liable to indemnify the Indemnitees under this Indemnification Agreement for any amounts paid in settlement of any action or claim effected without its written consent, provided such claim is filed within the applicable statute of limitations.  The Company shall not settle any action or claim without the Indemnitees’ written consent unless consideration for the settlement is solely a monetary payment borne by the Company with no admission of liability on the part of Indemnitees.  Neither the Company nor the Indemnitees shall unreasonably withhold consent to any proposed settlement.

 

7.                                      All agreements and obligations of the Company contained herein shall continue during the period any of Kearns, Capstone or the Capstone Personnel is serving in any of the capacities referred to in Section 1 hereof and shall continue thereafter so long as the Indemnitees or their respective successors, assigns, executors, administrators, legal representatives or heirs could be subject to any possible claim or threatened, pending or completed proceeding by reason of the fact that the Indemnitees was serving in any of such capacities.  The Indemnitees shall be third party beneficiaries of this Indemnification Agreement with the right to enforce this Indemnification Agreement.

 

8.                                      (a)                                 Any notice or other communication under this Indemnification Agreement shall be in writing and shall be deemed given when delivered personally or mailed by certified mail, return receipt requested, to the parties as follows:

 

If to the Company:

 

Gleacher & Company, Inc.
 1290 Sixth Avenue 
 New York, NY 10104

Attention:

Fax:

 

If to the Indemnitees:

 

Christopher J. Kearns

 

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Capstone Advisory Group, LLC

104 West 40th Street, 16th Floor

New York, NY 10018

Fax:                                                                       212-782-1478

 

With a copy to:

 

Hahn & Hessen LLP

488 Madison Avenue

New York, NY 10022

Attention:                                         James Kardon

Fax:                                                                       212-478-7400

 

or to such other address or person as any party hereto may specify by notice to the other.

 

(b)                                 The waiver by any party and the breach of any of the provisions of this Indemnification Agreement shall not operate or be construed as a waiver of any subsequent breach hereof.

 

(c)                                  This Indemnification Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, assigns, executors, administrators, legal representatives and heirs.

 

(d)                                 This Indemnification Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without regard to conflict of law provisions.

 

(e)                                  Each of the parties hereto submits to the jurisdiction of the Chancery Court of the State of Delaware or the State of New York with respect to any disputes, directly or indirectly, to any matter of interpretation of this Indemnification Agreement or the respective rights or obligations of each of the parties hereto (whether or not any such party is otherwise subject to the jurisdiction or venue of the federal and state courts sitting in the States of Delaware or New York).  Each of the parties specifically waives any objection which it may otherwise have to the jurisdiction or venue of any such courts and acknowledges that service of process may be made by mailing a copy thereof in accordance with the provisions of subsection (a) above.

 

(f)                                   Each of the provisions of this Indemnification Agreement is a separate and distinct agreement and independent of all others, so that if any provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or enforceability shall not affect the validity or enforceability of any other provisions hereof.  This Indemnification Agreement is being entered into pursuant to the Delaware Company Law and as such is intended to be supplemental to any other rights to indemnification available to the Indemnitees.  Nothing herein shall be deemed to diminish or otherwise restrict the Indemnitee’s right to indemnification under any provision of the Certificate of Incorporation or bylaws of the Company.

 

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(g)                                  No amendment, modification, termination or cancellation of this Indemnification Agreement shall be effective unless in writing and signed by both parties hereto.

 

9.                                      The obligations of the Company hereunder are solely Company obligations, and no officer, director, employee, agent, shareholder, member, manager or controlling person of the Company shall be subjected to any personal liability whatsoever to the Indemnitee, nor will any such claim be asserted by or on behalf of the Indemnitees or their respective successors, assigns, executors, administrators, legal representatives or heirs.  The limitations on liability and indemnification contained in this Indemnification Agreement shall survive the completion, expiration, termination or suppression of this Indemnification Agreement.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.

 

 

	
 
    	
Gleacher &   Company, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark Patterson
    
	
 
    	
Name:   Mark Patterson
    
	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Christopher J. Kearns
    
	
 
    	
Christopher   J. Kearns
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Capstone   Advisory Group, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christopher J. Kearns
    
	
 
    	
Name:
    	
Christopher   J. Kearns
    
	
 
    	
Title:
    	
Manager
    
					

 

Signature Page to Indemnification AgreementExhibit 10.3

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement, dated as of                           , is made by and between Gleacher & Company, Inc., a Delaware corporation (the “Corporation”), and                                                                                               (the “Indemnitee”).

 

RECITALS

 

A.                                    The Corporation recognizes that competent and experienced persons are increasingly reluctant to serve or to continue to serve on the board of directors of corporations unless they 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;

 

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 and officers with adequate, reliable knowledge of legal risks to which they are exposed or information regarding the proper course of action to take;

 

C.                                    The Corporation and Indemnitee recognize that plaintiffs often seek damages in such large amounts and the costs of litigation may be so enormous (whether or not the case is meritorious), that the defense and/or settlement of such litigation is often beyond the personal resources of directors, officers and other employees and representatives of the Company;

 

D.                                    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.  The Corporation believes that the interests of the Corporation and its stockholders would best be served by a combination of such insurance and the indemnification by the Corporation of the directors and officers of the Corporation;

 

E.                                     Section 145 of the Delaware General Corporation Law (the “DGCL”), under which the Corporation is organized, empowers the Corporation to indemnify its officers, directors, employees and agents by agreement and to indemnify persons who serve, at the request of the Corporation, as the directors, officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnifications set forth therein are not exclusive;

 

F.                                      Section 102(b)(7) of the DGCL allows a corporation to include in its certificate of incorporation a provision limiting or eliminating the personal liability of a director for monetary damages in respect of claims by shareholders and corporations for breach of certain fiduciary duties, and the Corporation has so provided in its Amended and Restated Certificate of Incorporation that each of its directors shall be exculpated from such liability to the maximum extent permitted by law;

 

G.                                    The Corporation’s Amended and Restated Bylaws require the Corporation to indemnify its directors and officers to the fullest extent permitted by the DGCL;

 

H.                                   The Board of Directors (“Board”) of the Corporation has determined that contractual indemnification for its directors as set forth herein is not only reasonable and prudent but also promotes the best interests of the Corporation and its stockholders;

 

 

I.                                        The Corporation desires and has requested Indemnitee to serve or continue to serve as a director of the Corporation, free from undue concern for unwarranted claims for damages arising out of or related to such services to the Corporation; and

 

J.                                        Indemnitee is willing to serve, continue to serve or to provide additional service for or on behalf of the Corporation on the condition that he is furnished the indemnity provided for herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Section 1. Services to the Company.  Indemnitee agrees to serve as a director of the Corporation.  Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by law).  This Agreement shall not be deemed an employment contract between the Corporation (or any of its subsidiaries or any other enterprise) and Indemnitee.  The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a director of the Corporation.

 

Section 1A. Generally.

 

To the fullest extent permitted by the laws of the State of Delaware:

 

(a) The Corporation shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed c, whether civil, criminal, administrative or investigative: (A) by reason of the fact that (i) Indemnitee is or was, or has agreed to serve at the request of the Corporation as, a director, officer, employee or agent of the Corporation, or (ii) while serving as a director of the Corporation, Indemnitee is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise; or (B) by reason of any action alleged to have been taken or omitted in any such capacity.  For the avoidance of doubt, the foregoing indemnification obligation includes, without limitation, claims for monetary damages against Indemnitee in respect of an alleged breach of fiduciary duties, to the fullest extent permitted under Section 102(b)(7) of the DGCL as in existence on the date hereof.

 

(b) The indemnification provided by this Section 1A shall be from and against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such action, suit or proceeding and any appeal therefrom, but shall only be provided if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action, suit or proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

 

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(c) Notwithstanding the foregoing provisions of this Section 1A, in the case of any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor:  (i) by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Corporation; or (ii) while serving as a director of the Corporation, is or was serving, or has agreed to serve, at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation unless, and only to the extent that, the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

 

(d) The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

Section 2. Successful Defense; Partial Indemnification. To the extent that Indemnitee has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1A hereof or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred in connection therewith. For purposes of this Agreement and without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

 

If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of the expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any action, suit, proceeding or investigation, or in defense of any claim, issue or matter therein, and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement to which Indemnitee is entitled.

 

Section 3. Determination That Indemnification Is Proper. Any indemnification hereunder shall (unless otherwise ordered by a court) be made by the Corporation unless a determination is made that indemnification of such person is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Section 1A(b) hereof. Any such determination shall be made (i) by a majority vote of the directors who are not parties to the 

 

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action, suit or proceeding in question (“disinterested directors”), even if less than a quorum, (ii) by a majority vote of a committee of disinterested directors designated by majority vote of disinterested directors, even if less than a quorum, (iii) by a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote on the matter, voting as a single class, which quorum shall consist of stockholders who are not at that time parties to the action, suit or proceeding in question, (iv) by independent legal counsel, or (v) by a court of competent jurisdiction.

 

Section 4. Advance Payment of Expenses; Notification and Defense of Claim.

 

(a) Expenses (including attorneys’ fees) incurred by Indemnitee in defending a threatened or pending civil, criminal, administrative or investigative action, suit or proceeding, or in connection with an enforcement action pursuant to Section 5(b), shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding within thirty (30) days after receipt by the Corporation of (i) a statement or statements from Indemnitee requesting such advance or advances from time to time, and (ii) an undertaking by or on behalf of Indemnitee to repay such amount or amounts, only if, and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Corporation as authorized by this Agreement or otherwise.  Advances shall be unsecured and interest-free.  In the event that final disposition of any such action, suit or proceeding determines that the Indemnitee is not entitled to be indemnified for expenses for which the Indemnitee has received payment or reimbursement, the Indemnitee shall repay such amount to the Corporation within ninety (90) days of receipt by the Indemnitee of an accounting in writing from the Corporation of the amount owing.

 

(b) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if a claim thereof is to be made against the Corporation hereunder, notify the Corporation of the commencement thereof.  The failure to promptly notify the Corporation of the commencement of the action, suit or proceeding, or Indemnitee’s request for indemnification, will not relieve the Corporation from any liability that it may have to Indemnitee hereunder, except to the extent the Corporation is prejudiced in its defense of such action, suit or proceeding as a result of such failure.

 

(c) In the event the Corporation shall be obligated to pay the expenses of Indemnitee with respect to an action, suit or proceeding, as provided in this Agreement, the Corporation shall be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so.  After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Corporation, the Corporation will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same action, suit or proceeding, provided that (1) Indemnitee shall have the right to employ Indemnitee’s own counsel in such action, suit or proceeding at Indemnitee’s expense and (2) if (i) the employment of counsel by Indemnitee has been previously authorized in writing by the Corporation, (ii) counsel to the Corporation or Indemnitee shall have reasonably concluded that there may be a conflict of interest or position, or reasonably believes that a conflict is likely to arise, on any significant issue between the Corporation and Indemnitee in the conduct of any such defense or (iii) the Corporation shall not, in fact, have employed counsel to assume the defense of such action, suit or proceeding, then the fees and expenses of Indemnitee’s counsel 

 

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shall be at the expense of the Corporation, except as otherwise expressly provided by this Agreement.  The Corporation shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for the Corporation or Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.

 

(d) Notwithstanding any other provision of this Agreement to the contrary, to the extent that Indemnitee is, by reason of Indemnitee’s corporate status with respect to the Corporation or any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee is or was serving or has agreed to serve at the request of the Corporation, a witness or otherwise participates in any action, suit or proceeding at a time when Indemnitee is not a party in the action, suit or proceeding, the Corporation shall indemnify Indemnitee against all expenses (including attorneys’ fees) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

Section 5. Procedure for Indemnification

 

(a) To obtain indemnification, Indemnitee shall promptly submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Corporation shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

 

(b) The Corporation’s determination whether to grant Indemnitee’s indemnification request shall be made promptly, and in any event within sixty (60) days following receipt of a request for indemnification pursuant to Section 5(a). The right to indemnification as granted by Section 1A of this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or fails to respond within such 60-day period.  It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 4 hereof where the required undertaking, if any, has been received by the Corporation) that Indemnitee has not met the standard of conduct set forth in Section 1A hereof, but the burden of proving such defense by clear and convincing evidence shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors or one of its committees, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct set forth in Section 1A hereof, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors or one of its committees, its independent legal counsel, and its stockholders) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has or has not met the applicable standard of conduct.

 

(c) The Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification pursuant to this Section 5, and the Corporation shall have the burden of proof in overcoming that presumption in reaching a determination contrary to that presumption.  Such presumption shall be used as a basis for a 

 

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determination of entitlement to indemnification unless the Corporation overcomes such presumption by clear and convincing evidence.

 

Section 6. Insurance and Subrogation.

 

(a) The Corporation may purchase and maintain insurance on behalf of Indemnitee who is or was or has agreed to serve at the request of the Corporation as a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against, and incurred by, Indemnitee or on Indemnitee’s behalf in any such capacity, or arising out of Indemnitee’s status as such, whether or not the Corporation would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement. If the Corporation has such insurance in effect at the time the Corporation receives from Indemnitee any notice of the commencement of a proceeding, the Corporation shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the policy.  The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy.

 

(b) In the event of any payment by the Corporation under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Corporation to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Corporation shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

 

(c) The Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.

 

Section 7. Certain Definitions. For purposes of this Agreement, the following definitions shall apply:

 

(a)                                 The term “action, suit or proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative.

 

(b)                                 The term “by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Corporation, or, while serving as a director of the Corporation, Indemnitee is or was serving, or has agreed to serve, at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust,

 

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employee benefit plan or other enterprise” shall be broadly construed and shall include, without limitation, any actual or alleged act or omission to act.

 

(c)                                  The term “enforcement 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 an action to enforce indemnification or advancement rights, or an appeal from such action, including, without limitation, the premium, security for and other costs relating to any cost bond, supersedes bond or other appeal bond or its equivalent.

 

(d)                                 The term “expenses” shall mean and 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, participating, or being or preparing to be a witness in any action, suit or proceeding, or responding to, or objecting to, a request to provide discovery in any action, suit or proceeding.  Expenses also shall include expenses incurred in connection with any appeal resulting from any action, suit or proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as 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.

 

(e)                                  The term “judgments, fines and amounts paid in settlement” shall be broadly construed and shall include, without limitation, all direct and indirect payments of any type or nature whatsoever (including, without limitation, all penalties and amounts required to be forfeited or reimbursed to the Corporation), as well as any penalties or excise taxes assessed on a person with respect to an employee benefit plan).

 

(f)                                   The term “Corporation” shall include, without limitation and in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

 

(g)                                  The term “other enterprises” shall include, without limitation, employee benefit plans.

 

(h)                                 The term “serving at the request of the Corporation” shall include, without limitation, any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries.

 

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(i)                                     A person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Agreement.

 

Section 8. Limitation on Indemnification.  Notwithstanding any other provision herein to the contrary, the Corporation shall not be obligated pursuant to this Agreement:

 

(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to an action, suit or proceeding (or part thereof) initiated by Indemnitee, except with respect to an action, suit or proceeding brought to establish or enforce a right to indemnification (which shall be governed by the provisions of Section 8(b) of this Agreement), unless such action, suit or proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.

 

(b) Action for Indemnification. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, unless Indemnitee is successful in establishing Indemnitee’s right to indemnification in such action, suit or proceeding, in whole or in part, or unless and to the extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s failure to establish their right to indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however, that nothing in this Section 8(b) is intended to limit the Corporation’s obligation with respect to the advancement of expenses to Indemnitee in connection with any such action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, as provided in Section 4 hereof.

 

(c) Section 16 Violations. To indemnify Indemnitee on account of any proceeding with respect to which final judgment is rendered against Indemnitee for payment or an accounting of profits arising from the purchase or sale by Indemnitee of securities, whether as a result of operation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar state statutory law or common law.

 

(d) Non-compete and Non-disclosure.  To indemnify Indemnitee in connection with proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or the non-compete and/or non-disclosure provisions of employment, consulting or similar agreements the Indemnitee may be a party to with the Corporation, or any subsidiary of the Corporation or any other applicable foreign or domestic corporation, partnership, joint venture, trust or other enterprise, if any.

 

(e) Insurance Payments.  To indemnify Indemnitee for expenses or liabilities of any type which have been paid directly to the Indemnitee by an insurance carrier under a policy or directors’ liability insurance maintained by the Corporation, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision.

 

Section 9.  Certain Settlement Provisions.  The Corporation shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of any action, suit or proceeding without the Corporation’s prior written consent, which shall not be unreasonably withheld.  The Corporation shall not settle any action, suit or proceeding in any manner that 

 

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would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent, which shall not be unreasonably withheld.

 

Section 10. Savings Clause. If any provision or provisions of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify Indemnitee as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the full extent permitted by applicable law.

 

Section 11. Contribution.  In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event, the Corporation shall, to the fullest extent permitted by law, contribute to the payment of Indemnitee’s costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, in an amount that is just and equitable in the circumstances, taking into account all of the circumstances of such action, suit or proceeding in order to reflect (i) the relative benefits received by the Corporation and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such action, suit or proceeding; and/or (ii) the relative fault of the Corporation (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s); provided, that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to (i) the failure of Indemnitee to meet the standard of conduct set forth in Section 1A hereof, or (ii) any limitation on indemnification set forth in Section 6(c), 8 or 9 hereof.

 

Section 12. Form and Delivery of Communications.  Any notice, request or other communication required or permitted to be given to the parties under this Agreement shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, return receipt requested, postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

 

If to the Corporation:

Gleacher & Company, Inc.

1290 Avenue of the Americas

New York, NY 10104

Attn: General Counsel

Facsimile:  (800) 887-4129

 

If to Indemnitee:

 

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Section 13. Subsequent Legislation. If the DCGL is amended after adoption of this Agreement to expand further the indemnification permitted to directors or officers, then the Corporation shall indemnify Indemnitee to the fullest extent permitted by the DGCL, as so amended.

 

Section 14. Nonexclusivity.  The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, the Corporation’s Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, in any court in which a proceeding is brought, the vote of the Corporation’s stockholders or disinterested directors, other agreements or otherwise, and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as an agent of the Corporation and shall inure to the benefit of the heirs, executors and administrators of Indemnitee.  However, no amendment or alteration of the Corporation’s Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws or any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement.

 

Section 15. Enforcement.

 

(a)                                 The Corporation shall be precluded from asserting in any judicial proceeding that the procedures and presumptions of this Agreement are not valid, binding and enforceable. The Corporation agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which a proceeding by Indemnitee for enforcement of his rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Corporation to comply with the provisions of this Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Corporation of its obligations under this Agreement.

 

(b)                                 The Corporation shall indemnify Indemnitee against any and all enforcement expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Corporation of a written request therefor) advance, to the extent not prohibited by law, such enforcement expenses to Indemnitee, which are incurred by Indemnitee in connection with any action, suit or proceeding brought by Indemnitee for indemnification or advancement from the Corporation under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Corporation; provided, however that this Section 15(b) shall not apply if, as part of such action, suit or proceeding, the court of competent jurisdiction determines that the material assertions made by Indemnitee as a basis for such action, suit or proceeding were not made in good faith or were frivolous.

 

Section 16. Interpretation of Agreement.  It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by law.

 

Section 17. Entire Agreement.  This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters 

 

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covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are expressly superceded by this Agreement.

 

Section 18. Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

Section 19. Successor and Assigns.  All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement in form and substance reasonably satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

 

Section 20. Service of Process and Venue.  For purposes of any claims or proceedings to enforce this agreement, the Corporation consents to the jurisdiction and venue of any federal or state court of competent jurisdiction in the state of Delaware, and waives and agrees not to raise any defense that any such court is an inconvenient forum or any similar claim.

 

Section 21. Governing Law.  This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware.  If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Delaware govern indemnification by the Corporation of its officers and directors, then the indemnification provided under this Agreement shall in all instances be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

 

Section 22. Employment Rights. Nothing in this Agreement is intended to create in Indemnitee any right to employment or continued employment.

 

Section 23. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.

 

Section 24.  Headings. The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

 

 

	
 
    	
GLEACHER &   COMPANY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Name:   
    	
Christopher   J. Kearns
    
	
 
    	
Title:
    	
Chief   Restructuring Officer and Chief
    
	
 
    	
 
    	
Executive   Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INDEMNITEE:
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Name:
    
					

 

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