Exhibit 10.8
Form of Indemnification Agreement
(and list of parties who will execute such agreement)
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made this ____ day of _________, 1998, between Nationwide
Electric, Inc., a Delaware corporation (the "Company"), and
__________________________ (the "Indemnitee").
WHEREAS, it is important to the Company to attract and retain as directors
and officers the most capable persons available; and
WHEREAS, the Bylaws of the Company (the "Bylaws") provide for the
indemnification of the directors, officers, employees and agents of the Company
as authorized by Delaware General Corporation Law Section 145 (the "State
Statute"); and
WHEREAS, such Bylaws and the State Statute specifically provide that they
are not exclusive, and thereby contemplate that contracts may be entered into
between the Company and its directors and officers with respect to
indemnification of such directors and officers; and
WHEREAS, in accordance with the authorization provided by the State Statute
and the Bylaws, the Company may purchase a policy or policies of Directors and
Officers Liability Insurance ("D&O Insurance"), covering certain liabilities
which may be incurred by its directors and officers in the performance of their
services for the Company; and
WHEREAS, recent developments with respect to the terms and availability of
D&O Insurance and with respect to the application, amendment and enforcement of
statutory and bylaw indemnification provisions generally have raised questions
concerning the adequacy and reliability of the protection afforded to directors
and officers thereby; and
WHEREAS, in order to resolve such questions and thereby induce the
Indemnitee to agree to serve or continue to serve as a director and/or officer
of the Company, the Company has determined and agreed to enter into this
contract with the Indemnitee;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
agreeing to serve or continuing to serve as a director and/or officer of the
Company, the parties hereto agree as follows:
1. Indemnity. The Company hereby agrees to hold harmless and indemnify the
Indemnitee to the full extent permitted by law:
(a) Against any and all expenses (including attorneys' fees),
judgments, fines, penalties and amounts paid in settlement (including,
without limitation, all interest, assessments and other charges paid or
payable in connection therewith) actually and reasonably incurred by the
Indemnitee in connection with any threatened, pending or completed action,
suit or proceeding, whether brought by or in the right of the Company
or otherwise and whether civil, criminal, administrative or investigative,
to which the Indemnitee is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that the Indemnitee
is, was or at any time becomes a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or
other entity or enterprise, or by reason of anything done or not done by
Indemnitee in any such capacity, whether prior to or subsequent to the date
of this Agreement; and
(b) Against any and all expenses (including attorneys' fees) actually
and reasonably incurred by the Indemnitee in serving or preparing to serve
as a witness or other participant in any threatened, pending or completed
action, suit or proceeding, whether brought by or in the right of the
Company or otherwise and whether civil, criminal, administrative or
investigative, if Indemnitee is such a witness or participant by reason of
the fact that the Indemnitee is, was or at any time becomes a director,
officer, employee, agent or fiduciary of the Company or is or was serving
at the request of the Company as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other entity or enterprise.
2. Specific Limitations on Indemnity. Indemnitee shall not be entitled
to indemnification under this Agreement:
(a) In respect to remuneration paid to or advantage gained by the
Indemnitee if it shall be determined by a final judgment or other final
adjudication that the Indemnitee was not legally entitled to such
remuneration or advantage;
(b) On account of the Indemnitee's conduct which is determined by a
final judgment or other final adjudication to have been knowingly
fraudulent, deliberately dishonest or willful misconduct;
(c) Prior to a Change in Control (as defined in Section 4(e)), in
respect of any action, suit or proceeding initiated by the Indemnitee
against the Company or any director or officer of the Company (unless the
Company has joined in or consented to the initiation of such action, suit
or proceeding), except (i) as set forth in Section 12(b) hereof, (ii) in
respect of any counterclaims made against Indemnitee in any such action,
suit or proceeding, and (iii) to the extent Indemnitee seeks contribution
or apportionment of an award or settlement against Indemnitee and against
the Company and/or any other director or officer of the Company;
(d) On account of any matter determined by a final judgment or other
final adjudication to be a violation by the Indemnitee of the provisions of
Section 16 of the Securities Exchange Act of 1934, as amended (the "Act"),
or the rules and regulations promulgated thereunder, as amended from time
to time; or
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(e) With respect to any matter if it shall be determined by a final
judgment or other final adjudication that such indemnification is not
lawful.
3. Advance of Expenses and Payment of Indemnification. Upon the written
request of Indemnitee, expenses that are subject to indemnification under this
Agreement shall be advanced by the Company within five (5) business days of
receipt of such request. Subject to Section 4(a), indemnification shall be made
under this Agreement no later than sixty (60) days after receipt by the Company
of the written request of Indemnitee, which written request shall identify the
judgments, fines, penalties and amounts paid in settlement that are subject to
indemnification under this Agreement and for which indemnification is requested.
Written request shall be deemed received three days after the date postmarked if
sent by prepaid mail properly addressed to the Company at the address set forth
in Section 11 hereof.
4. Determination of Indemnification.
(a) Notwithstanding any other provision of this Agreement (i) the
obligations of the Company under Section 1 shall be subject to the condition
that the Reviewing Party shall have determined (in a written opinion, in any
case in which the Independent Legal Counsel referred to in Section 4(c) is
involved) that Indemnitee would be permitted to be indemnified under this
Agreement, (ii) the obligation of the Company to make an expense advance
pursuant to Section 3 shall be subject to the condition that, if, when and to
the extent that it is finally determined that Indemnitee would not be permitted
to be indemnified for such expenses under this Agreement, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees and undertakes to
reimburse the Company) for all such amounts theretofore paid, and (iii) the
obligation of the Company to make an expense advance pursuant to Section 3 shall
be made without regard to the Indemnitee's ability to repay the amount advanced
and without regard to the Indemnitee's ultimate entitlement to indemnification
under this Agreement or otherwise. Indemnitee's obligation to reimburse the
Company for expense advances shall be unsecured and no interest shall be charged
thereon.
(b) The Reviewing Party shall be selected by the Board of Directors,
provided, however, that if there has been a Change in Control (other than a
Change in Control which has been approved by a majority of the Company's Board
of Directors who were directors immediately prior to such Change in Control) the
Reviewing Party shall be the Independent Legal Counsel referred to in Section
4(c). If there has been no determination by the Reviewing Party within the
sixty (60) day period referred to in Section 3, the Reviewing Party shall be
deemed to have made a determination that it is permissible to indemnify
Indemnitee under this Agreement.
(c) The Company agrees that if there is a Change in Control of the Company
(other than a Change in Control which has been approved by a majority of the
Company's Board of Directors who were directors immediately prior to such Change
in Control) then Independent Legal Counsel shall be selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld) and
such Independent Legal Counsel shall determine whether
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the director or officer is entitled to indemnification for expenses, judgments,
fines, penalties and amounts paid in settlement (including, without limitation,
all interest, assessments and other charges paid or payable in connection
therewith) under this Agreement or any other agreement or the Certificate of
Incorporation or Bylaws of the Company now or hereafter in effect relating to
indemnification. Such Independent Legal Counsel shall render its written opinion
to the Company and Indemnitee as to whether and to what extent the Indemnitee
will be permitted to be indemnified for expenses, judgments, fines, penalties
and amounts paid in settlement (including, without limitation, all interest,
assessments and other charges paid or payable in connection therewith). The
Company agrees to pay the reasonable fees of the Independent Legal Counsel and
to indemnify fully such Independent Legal Counsel against any and all expenses
(including attorneys' fees), claims, liabilities and damages arising out of or
relating to this Agreement or the engagement of Independent Legal Counsel
pursuant hereto.
(d) If a determination denying Indemnitee's claim is made by a Reviewing
Party (other than Independent Legal Counsel), notice of such determination shall
disclose with particularity the reasons for such determination. If a
determination denying Indemnitee's claim is made by Independent Legal Counsel,
the notice shall include a copy of the related legal opinion of such counsel.
(e) "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Act), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 15% or more of the total voting power represented by
the Company's then outstanding Voting Securities, or (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 85% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
assets of the Company.
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(f) "Reviewing Party" shall mean any appropriate person or body consisting
of a member or members of the Board of Directors of the Company or any other
person or body appointed by the Board who is not a party to the particular
action, suit or proceeding with respect to which Indemnitee is seeking
indemnification, or Independent Legal Counsel.
(g) "Independent Legal Counsel" shall mean an attorney, selected in
accordance with the provisions of Section 4(c), who shall not have otherwise
performed services for the Company or Indemnitee within the last five years
(other than in connection with seeking indemnification under this Agreement).
Independent Legal Counsel shall not be any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement, nor shall Independent Legal
Counsel be any person who has been sanctioned or censured for ethical violations
of applicable standards of professional conduct.
(h) "Voting Securities" shall mean any securities of the Company which vote
generally in the election of directors.
5. Partial Indemnity. If the Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines, penalties and amounts paid in settlement (including,
without limitation, all interest, assessments and other charges paid or payable
in connection therewith) incurred by the Indemnitee, but not for the total
amount thereof, the Company shall indemnify Indemnitee for the portion thereof
to which Indemnitee is entitled. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on merits or
otherwise in defense of any or all actions, suits or proceedings relating in
whole or in part to an event subject to indemnification hereunder or in defense
of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against expenses incurred in connection with
such action, suit, proceeding, issue or matter, as the case may be.
6. Non-exclusivity. The rights of the Indemnitee under this Agreement
shall be in addition to any other rights Indemnitee may have under the
Certificate of Incorporation, the Bylaws, any other agreement of the Company,
the Delaware General Corporation Law ("DGCL"), D&O Insurance or otherwise. To
the extent that any change in the DGCL (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Certificate of Incorporation and the Bylaws of the Company and this
Agreement, it is the intent of the parties hereto that Indemnitee shall by this
Agreement be entitled to the greater benefits so afforded by such change.
7. Liability Insurance. To the extent the Company maintains D&O
Insurance, the Company shall maintain coverage for Indemnitee under such policy
or policies, in accordance with its or their terms, to the maximum extent of the
coverage provided under such policy or policies in effect for any other director
or officer of the Company.
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8. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any claim against the
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, Bylaw or otherwise) of the amounts otherwise
indemnifiable hereunder or to the extent that Indemnitee is entitled to be
indemnified directly by any insurance company under the individual directors'
and officers' liability provisions of any D&O Insurance maintained by the
Company.
9. No Presumption. For purposes of this Agreement, the termination of
any claim, actions, suit or proceeding by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not of itself create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.
10. Continuation of Indemnity. All agreements and obligations of the
Company contained herein shall continue during the period the Indemnitee is a
director, officer, employee, agent or fiduciary of the Company, or is serving at
the request of the Company as a director, officer, employee, agent or fiduciary
of another corporation, partnership, joint venture, trust or other entity or
enterprise, and shall continue thereafter so long as the Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit
or proceeding, whether civil, criminal or investigative, by reason of the fact
that the Indemnitee was a director or officer of the Company or serving in any
other capacity referred to herein.
11. Notification of Proceedings; Consent to Settlements; Defense.
(a) Promptly after receipt by the Indemnitee of notice of the commencement
of any action, suit or proceeding, the Indemnitee shall, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof. Notice shall be in writing and shall be
addressed as follows:
Nationwide Electric, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx, XX
Such notice shall be deemed received if sent by prepaid mail properly
addressed. Indemnitee and the Company shall cooperate fully with each other in
the defense of any such action, suit or proceeding and each shall provide the
other with such information as the other may reasonably require. The Company
shall not be liable to indemnify the Indemnitee under this Agreement for any
amounts paid in settlement of any action, suit or proceeding effected without
its prior written consent (which consent shall not be unreasonably withheld).
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(b) The Company shall be entitled to participate in the Proceeding at its
own expense.
(c) Except as otherwise provided below, the Company may, at its option,
assume the defense of such action, suit or proceeding with legal counsel
reasonably satisfactory to the Indemnitee. After notice from the Company to the
Indemnitee of its election to assume the defense of an action, suit or
proceeding, the Company will not be liable to the Indemnitee for expenses
incurred by the Indemnitee in connection with such action, suit or proceeding
under this Agreement, including Section 3 hereof, other than Indemnitee's
reasonable costs of investigation or participation in such action, suit or
proceeding (including, without limitation, travel expenses) and except as
provided below. The Indemnitee shall have the right to employ Indemnitee's own
counsel in any 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 of such action, suit or proceeding shall be at the expense of the
Indemnitee, unless (i) the employment of counsel by the Indemnitee has been
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of the defense of such action, suit or proceeding, or (iii) the
Company shall not in fact have employed counsel to assume the defense of such
action, suit or proceeding, in each of which cases the fees and expenses of the
Indemnitee's counsel shall be advanced by the Company as provided in Section 3
hereof. The Company shall not be entitled to assume the defense of any such
action, suit or proceeding brought by or on behalf of the Company.
(d) If two or more persons, including the Indemnitee, may be entitled to
indemnification from the Company as parties to any action, suit or proceeding,
the Company may require the Indemnitee to use the same legal counsel as the
other parties. The Indemnitee shall have the right to use separate legal counsel
in such action, suit or proceeding, but the Company shall not be liable to the
Indemnitee under this Agreement, including Section 3 hereof, for the fees and
expenses of separate legal counsel incurred after notice from the Company of the
requirement to use the same legal counsel as the other parties, unless the
Indemnitee reasonably concludes that there may be a conflict of interest between
the Indemnitee and any of the other parties required by the Company to be
represented by the same legal counsel.
(e) The Indemnitee shall permit the Company to settle any action, suit or
proceeding that the Company assumes the defense of, except that the Company
shall not, without the Indemnitee's written consent, settle any action, suit or
proceeding unless such settlement includes a provision whereby the parties to
the settlement unconditionally release Indemnitee from all liabilities, damages,
fines, penalties, costs and expenses in respect of claims by reason of the
settlement or release of the parties in such action, suit or proceeding.
12. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on it hereby in order to induce
the Indemnitee to agree to serve or to continue to serve as a director and/or
officer of the Company and
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acknowledges that the Indemnitee is relying upon this Agreement in agreeing to
serve or continuing to serve in such capacity.
(b) The right to indemnification provided by this Agreement shall be
enforceable by Indemnitee in any court in the State of Delaware having subject
matter jurisdiction thereof and in which venue is proper. The Indemnitee shall
have the right to commence litigation in any such court challenging any
determination by the Reviewing Party or any aspect thereof, or the legal or
factual bases therefor. The Company shall reimburse Indemnitee for any and all
reasonable expenses (including attorneys' fees) incurred by Indemnitee in
connection with any claim asserted or action brought by Indemnitee to enforce
rights or to collect moneys due under this Agreement, the Certificate of
Incorporation or the Bylaws of the Company or any other agreement with the
Company nor or hereafter in effect relating to indemnification, or any D&O
Insurance purchased and maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance coverage, as the case may be, unless the
court determines that the claim or action is frivolous or that assertions made
therein were made with no reasonable basis.
(c) In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the
burden of proof shall be on the Company to establish that Indemnitee is not so
entitled.
13. Separability. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
14. Governing Law; Binding Effect; Amendment and Termination.
(a) This Agreement shall be interpreted and enforced in accordance with the
laws of the State of Delaware without giving effect to the principles of
conflicts of laws thereof.
(b) This Agreement shall be binding upon the Indemnitee and upon the
Company, its successors and assigns (including any transferee of all or
substantially all of the assets of the Company and any successor by merger or
operation of law), and shall inure to the benefit of the Indemnitee, his or her
heirs, personal representatives and assigns and to the benefit of the Company,
its successors and assigns. The Company shall require and cause any successor to
all or substantially all of its assets, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no succession had taken place.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto. No
waiver of any provision of this
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Agreement shall be deemed or shall constitute a waiver of any other provision
hereof, and no such waiver shall constitute a continuing waiver.
15. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of such Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
16. Change in Other Rights. The Company will not adopt any amendment to
the Certificate of Incorporation or Bylaws of the Company the effect of which
would be to deny, diminish or encumber the Indemnitee's rights to
indemnification, advancement of expenses, exculpation or maintenance of the D &
O Insurance hereunder, under such other documents or under applicable law, as
applied to any act or failure to act occurring in whole or in part prior to the
date upon which any such amendment was approved by the Board of Directors or the
stockholders, as the case may be. Notwithstanding the foregoing, if the Company
adopts any amendment to the Certificate of Incorporation or Bylaws the effect of
which is to so deny, diminish or encumber such rights, such amendment will apply
only to acts or failures to act occurring entirely after the effective date
thereof.
17. Savings Clause. If this Agreement or any provision hereof is
invalidated on any ground by any court of competent jurisdiction, the Company
shall nevertheless indemnify the Indemnitee as to any expenses, judgments,
fines, penalties and amounts paid in settlement actually and reasonably incurred
by the Indemnitee in connection with any action, suit or proceeding to the
fullest extent permitted by any applicable provision of this Agreement that has
not been invalidated and to the fullest extent permitted by Delaware law.
18. Deposit of Funds in Trust. In the event that the Company decides to
voluntarily dissolve or to file a voluntary petition for relief under applicable
bankruptcy, moratorium or similar laws, then not later than ten (10) days prior
to such dissolution or filing, the Company shall deposit in trust for the
exclusive benefit of Indemnitee a cash amount equal to all amounts previously
authorized to be paid to Indemnitee hereunder, such amounts to be used to
discharge the Company's obligations to Indemnitee hereunder. Any amount in such
trust not required for such purpose shall be returned to the Company.
19. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NATIONWIDE ELECTRIC, INC.
By:
------------------------
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LIST OF PARTIES WHO WILL EXECUTE INDEMNIFICATION AGREEMENTS
Name Title
---- -----
Xxxxxxx X. Xxxxx Chairman of the Board and Director
Xxxxxxxxx X. Xxxxx, XX President, Chief Executive Officer and
Director Nominee
Xxxxx X. Xxxxx Vice President, Chief Financial Officer,
Secretary and Treasurer
Xxxx X. Xxxx Vice President, Acquisitions
Xxxxx X. Xxxxx Vice President, Operations
Xxxxxx X. Xxxxxxx Director Nominee
Xxxxxxx X. Xxxxxxxx Director
Xxxxxx X. Xxxxxxx Director
Xxxxxx X. Xxxxxxx Director
Xxxx X. Xxx Director Nominee
Xxxxxx X. Xxxxxx Director
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