Common use of Officer Liability Clause in Contracts

Officer Liability. Under the Merger Agreement, subject to certain terms therein, Numico shall (i) cause to be maintained for a period of six years the provisions regarding indemnification of current or former officers and directors of the Company contained in the Organizational Documents (as defined in the Merger Agreement) of the Company and its subsidiaries in effect following the Effective Time; provided that, in the event any claim or claims are asserted or made within such six-year period, all rights to indemnification in respect of any claim or claims shall continue until final disposition of any and all such claims; and (ii) maintain, for a period of six years, the Company's existing directors' and officers' liability insurance policy and fiduciary liability insurance (provided that Numico or the Surviving Corporation may substitute therefor policies of substantially similar coverage and amounts containing terms which are no less advantageous); provided, however, that Numico is not obligated to make annual premium payments for such insurance to the extent such premiums exceed $450,000. Notwithstanding anything to the contrary in the Merger Agreement, the Board was permitted to amend the Company's Bylaws to include, among other things, that (i) the Company shall indemnify each person who was or is a party, or is threatened to be made a party, or was or is a witness, to a Proceeding (as defined in the Bylaws), against all liability asserted against, or incurred by, such person by reason of the fact that such person is or was a director or officer of the Company (each an "Indemnified Person") and (ii) that reasonable costs, charges and expenses (including attorney's fees) incurred by an Indemnified Person in defending a Proceeding may and, in connection with a transaction involving a Change in Control (as defined in the Bylaws) of the Company or a potential Change in Control of the Company shall, be paid by the Company in advance of the final disposition of the Proceeding, upon receipt of an undertaking reasonably satisfactory to the Board by the Indemnified Person to repay all amounts so advanced if it is ultimately determined that such person is not entitled to indemnification by the Company. The Board took this action. Numico and the Purchaser agree that, for a period of not less than six years, the Bylaws of the Surviving Corporation shall include the same indemnification provisions as those set forth in the Company's Bylaws in effect on the date of the Merger Agreement (including the amendment referenced above), and none of the Company, Numico or the Surviving Corporation shall take any action which adversely affects the rights of any Indemnified Person who was an officer or director on the date of the Merger Agreement.