EXHIBIT 10.12 - INDEMNITY AGREEMENT
Indemnity Agreement in the form of the attached entered into with the
following Indemnitee as of the date indicated:
X.X. Xxxxxxx August 14, 1995
-40-
INDEMNITY AGREEMENT
This Agreement is made as of the 1st day of May, 1995, by and
between XXXX INDUSTRIES, INC., a Pennsylvania corporation (the
"Corporation"), and __________________, ("Indemnitee"), an officer/a Director.
WHEREAS, it is essential to the Corporation to retain and attract as
Directors and Officers the most capable persons available, and
WHEREAS, the substantial increase in corporate litigation subjects
Directors and Officers to expensive litigation risks and Directors' and
Officers' liability insurance is expensive and contains many limitations,
deductibles, and exclusions, and
WHEREAS, it is now and has always been the express policy of the
Corporation to indemnify its Directors and Officers so as to provide them with
the maximum possible protection permitted by the Pennsylvania Business
Corporation Law (the "Law") and the Corporation's By-Laws, and
WHEREAS, the parties recognize the potential inadequacy of the protection
available under the Law, the Corporation's By-Laws, and by Directors' and
Officers' liability insurance, and
WHEREAS, such Law and By-Laws specifically provide that they are not
exclusive, and thereby contemplate that agreements may be entered into between
the Corporation and Directors and Officers with respect to indemnification of
such Directors and Officers, and
WHEREAS, in order to resolve such questions and thereby induce Directors
and Officers to serve in their respective capacities, the Corporation has
determined and agreed to enter into this Agreement with the Indemnitee.
NOW THEREFORE, in consideration of Indemnitee's continued service after
the date hereof, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve.
Indemnitee agrees to serve as a Director or Officer (as applicable) of the
Corporation for so long as he is duly elected or appointed or until such time
as he tenders his resignation in writing.
2. Definitions.
As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether brought by or in the
right of the Corporation or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which
Indemnitee may be or may have been involved as a party or
otherwise, by reason of the fact that Indemnitee is or was a
-41-
Indemnity Agreement
Page 2
Director or Officer of the Corporation, by reason of any action
taken by his or of any inaction on his part while acting as a
Director or Officer, or by reason of the fact that he is or was
serving at the request of the Corporation as a director, officer,
employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise; in each case whether or not
he is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification or
reimbursement can be provided under this Agreement.
(b) The term "Expenses" shall include, without limitation, expenses of
investigations, judicial or administrative proceedings, or
appeals, judgments, fines and penalties, amounts paid in
settlement by or on behalf of Indemnitee, attorneys' fees and
disbursements, and any expenses of establishing a right to
indemnification under Paragraph 7.
3. Indemnity in Third-Party Proceedings.
The Corporation shall indemnify Indemnitee in accordance with the
provisions of this Paragraph 3 if Indemnitee is a party to or threatened to be
made a party to or otherwise involved in any Proceeding (other than a
Proceeding by or in the right of the Corporation) by reason of the fact that
Indemnitee is or was 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, or other
enterprise, against all Expenses actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such Proceeding,
but only if Indemnitee acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation and,
in the case of a criminal proceeding, in addition, had no reasonable cause to
believe that his conduct was unlawful. The termination of any such Proceeding
by judgment, order of court, 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 he reasonably
believed to be in or not opposed to the best interests of the Corporation, and
with respect to any criminal proceeding, that such person had reasonable cause
to believe that his conduct was unlawful.
4. Indemnity in Proceedings by or in the Right of the Corporation.
(a) In the event the Corporation has purchased and has in effect
policies of Directors' and Officers' liability insurance at the
time of request by Indemnitee for indemnification thereunder, the
Corporation shall, subject to the provisions of Paragraph 4(c),
indemnify Indemnitee as follows: if Indemnitee is a party to or
threatened to be made a party to any Proceeding by or in the right
of the Corporation by reason of the fact that Indemnitee is or was
a Director or Officer of the Corporation, or is or was serving at
-42-
Indemnity Agreement
Page 3
the request of the Corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against all Expenses actually and
reasonably incurred by Indemnitee in connection with the defense
or settlement of such Proceeding, but only if he acted in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation.
(b) In the event the Corporation is not covered by policies of
Directors' and Officers' Liability insurance which are applicable
to the indemnification claim being made by Indemnitee for
indemnification thereunder, the Corporation shall, subject to the
provisions of Paragraph 4(c), indemnify Indemnitee as follows: 1)
to the fullest extent of the coverage provided for the benefit of
Directors and Officers in the case of a Proceeding by or in the
right of the Corporation pursuant to the policy of insurance in
effect on the date of this Agreement; 2) if Indemnitee is a party
to or threatened to be made a party to any Proceeding by or in the
right of the Corporation by reason of the fact that Indemnitee is
or was 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, or other enterprise, against all Expenses actually
and reasonably incurred by Indemnitee in connection with the
defense or settlement of such Proceeding, but only if he acted in
good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Corporation; and 3) to
the fullest extent as may be provided to Indemnitee by the
Corporation under the Agreement, the By-Laws of the Corporation,
and the Law. The foregoing provisions shall be taken cumulatively
and construed as being consistent with one another.
(c) No indemnification for Expenses shall be made under Paragraphs
4(a) and 4(b):
(1) in respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication
that such remuneration was in violation of law;
(2) on account of any suit in which judgment is rendered against
Indemnitee for an accounting of profits made from the purchase
or sale by Indemnitee of securities of Corporation pursuant to
the provisions of Section 16(b) of the Securities Exchange Act
of 1934 and amendments thereto or similar provisions of any
federal, state, or local law;
(3) on account of Indemnitee's conduct which is finally adjudged
to have been knowingly fraudulent, deliberately dishonest, or
willful misconduct;
-43-
Indemnity Agreement
Page 4
(4) if a final decision by a Court having jurisdiction in the
matter shall determine that such indemnification is not
lawful.
5. Indemnification of Expenses of Successful Party.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue, or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
6. Advances of Expenses.
Expenses incurred by the Indemnitee pursuant to Paragraphs 3 and
4 shall be paid by the Corporation in advance upon the written request
of the Indemnitee if Indemnitee shall undertake to repay such amount to the
extent that it is ultimately determined that Indemnitee is not entitled to
indemnification.
7. Right of Indemnitee to Indemnification Upon Application.
Any indemnification under Paragraphs 3 and 4 shall be made no later than
45 days after receipt by the Corporation of the written request of Indemnitee,
unless a determination is made within said 45-day period by (1) the Board of
Directors by a majority vote of a quorum consisting of directors who are not
parties to such Proceeding or (2) independent legal counsel, which counsel
shall be appointed if the quorum of the Board of Directors specified in
Paragraph 7(1) is not obtainable, in a written opinion that the Indemnitee has
not met the relevant standards for indemnification set forth in Paragraphs 3
and 4.
The right to indemnification or advances as provided by this Agreement
shall be enforceable by Indemnitee in any court of competent jurisdiction. The
burden of proving that indemnification is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or independent legal counsel) to have made a determination prior to
the commencement of such action that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct,
nor an actual determination by the Corporation (including its Board of
Directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall bar the action or create an irrefutable
presumption that Indemnitee has not met the applicable standard of conduct.
Indemnitee's expenses reasonably incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
Proceeding shall also be indemnified by the Corporation.
-44-
Indemnity Agreement
Page 5
8. Indemnification Thereunder Not Exclusive.
The indemnification provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under the
Bylaws, any agreement, any vote of shareholders or disinterested Directors,
Law, or otherwise, both as to action in his official capacity and as to action
in any capacity while holding such office.
The indemnification under this Agreement shall continue as to Indemnitee
even though Indemnitee may have ceased to be a Director or Officer.
9. Partial Indemnification.
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for a portion of the Expenses actually and
reasonably incurred by his in the investigation, defense, appeal, or
settlement of any Proceeding but not, however, for the total amount thereof,
the Corporation shall nevertheless indemnify Indemnitee for the portion of
such Expenses to which Indemnitee is entitled.
The Corporation shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. The Corporation shall not settle any action or
claim in any manner which would impose any penalty or limitation on Indemnitee
without Indemnitee's written consent. Neither the Corporation nor the
Indemnitee will unreasonably withhold their consent to any proposed
settlement.
10. Saving Clause.
If this Agreement or any portion thereof shall be invalidated on any
ground by any court of competent jurisdiction, the Corporation shall
nevertheless indemnify Indemnitee as to Expenses with respect to any
Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated or by any other applicable law.
11. Notice.
Indemnitee shall, as a condition precedent to his right to be indemnified
under this Agreement, give to the Corporation notice in writing as soon as
practicable of any claim for which indemnification will or could be sought
under this Agreement. Notice to the Corporation shall be directed to Xxxx
Industries, Inc., Xxx Xxxx Xxxxx, X.X. Xxx 0000, Xxxx, XX 00000-0000,
Attention: President (or such other address as the Corporation shall designate
in writing to Indemnitee). Notice shall be deemed received three days after
the date postmarked if sent by prepaid mail properly addressed. In addition,
Indemnitee shall give the Corporation such information and cooperation as it
may reasonably require.
-45-
Indemnity Agreement
Page 6
12. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall constitute the original.
13. Applicable Law.
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania.
14. Successors and Assigns.
This Agreement shall be binding upon the Indemnitee and upon the
Corporation, its successors and assigns, and shall inure to the benefit of the
Indemnitee's heirs, personal representatives, and assigns and to the benefit
of Corporation, its successors and assigns.
IN WITNESS WHEREOF, the parties thereby have caused this Agreement to be
duly executed and signed as of the day and year first above written.
XXXX INDUSTRIES, INC.
By: __________________________________________
Chairman, Management Development
and Compensation Committee
INDEMNITEE: _________________________________
This Agreement was approved by stockholders of Xxxx Industries, Inc. at the
Annual Meeting on August 1, 1986.
-46-
