Exhibit 10.9
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT, dated as of _________ ___, 1997, between TRACK 'N
TRAIL, INC., a Delaware corporation (the "Corporation"), and _____________
("Indemnitee"),
W I T N E S S E T H:
WHEREAS, Indemnitee is either a member of the board of directors of the
Corporation (the "Board of Directors") or an officer of the Corporation, or
both, and in such capacity or capacities, or otherwise as an Agent (as
hereinafter defined) of the Corporation, is performing a valuable service for
the Corporation; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Corporation on the condition that he
be indemnified as herein provided; and
WHEREAS, it is intended that Indemnitee shall be paid promptly by the
Corporation all amounts necessary to effectuate in full the indemnity provided
herein:
NOW, THEREFORE, in consideration of the premises and the covenants in this
Agreement, and of Indemnitee continuing to serve the Corporation as an Agent and
intending to be legally bound hereby, the parties hereto agree as follows:
1. SERVICES BY INDEMNITEE. Indemnitee agrees to serve (a) as a director
or an officer of the Corporation, or both, so long as he is duly appointed or
elected and qualified in accordance with the applicable provisions of the
Certificate of Incorporation and By-laws of the Corporation, and until such time
as he resigns or fails to stand for election or is removed from his position, or
(b) otherwise as an Agent (as hereinafter defined) of the Corporation.
Indemnitee may from time to time also perform other services at the request or
for the convenience of, or otherwise benefiting the Corporation. Indemnitee may
at any time and for any reason resign or be removed from such position (subject
to any other contractual obligation or other obligation imposed by operation of
law), in which event the Corporation shall have no obligation under this
Agreement to continue Indemnitee in any such position.
2. INDEMNIFICATION. Subject to the limitations set forth herein and in
Section 6 hereof, the Corporation hereby agrees to indemnify Indemnitee as
follows:
The Corporation shall, with respect to any Proceeding associated with
Indemnitee's being an Agent of the Corporation, indemnify Indemnitee to the
fullest extent permitted by applicable law and the Certificate of Incorporation
of the Corporation
in effect on the date hereof or as such law or Certificate of Incorporation may
from time to time be amended (but, in the case of any such amendment, only to
the extent such amendment permits the Corporation to provide broader
indemnification rights than the law or Certificate of Incorporation permitted
the Corporation to provide before such amendment). The right to indemnification
conferred herein and in the Certificate of Incorporation shall be presumed to
have been relied upon by Indemnitee in serving or continuing to serve the
Corporation as an Agent and shall be enforceable as a contract right. Without
in any way diminishing the scope of the indemnification provided by this
Section 2, the Corporation will indemnify Indemnitee to the full extent
permitted by law if and wherever he is or was a party or is threatened to be
made a party to any Proceeding, including any such Proceeding brought by or in
the right of the Corporation, by reason of the fact that he is or was an Agent
or by reason of anything done or not done by him in such capacity, against
Expenses and Liabilities actually and reasonably incurred by Indemnitee or on
his behalf in connection with the investigation, defense, settlement or appeal
of such Proceeding. In addition to, and not as a limitation of, the foregoing,
the rights of indemnification of Indemnitee provided under this Agreement shall
include those rights set forth in Sections 3 and 8 below. Notwithstanding the
foregoing, the Corporation shall be required to indemnify Indemnitee in
connection with a Proceeding commenced by Indemnitee (other than a Proceeding
commenced by Indemnitee to enforce Indemnitee's rights under this Agreement)
only if the commencement of such Proceeding was authorized by the Board of
Directors.
3. ADVANCEMENT OF EXPENSES; LETTER OF CREDIT.
(a) ADVANCEMENT OF EXPENSES. All reasonable Expenses incurred by or on
behalf of Indemnitee (including costs of enforcement of this Agreement) shall be
advanced from time to time by the Corporation to him within thirty (30) days
after the receipt by the Corporation of a written request for an advance of
Expenses, whether prior to or after final disposition of a Proceeding (except to
the extent that there has been a Final Adverse Determination that Indemnitee is
not entitled to be indemnified for such Expenses), including without limitation
any Proceeding brought by or in the right of the Corporation. The written
request for an advancement of any and all expenses under this paragraph shall
contain reasonable detail of the Expenses incurred by Indemnitee. In the event
that such written request shall be accompanied by an affidavit of counsel to
Indemnitee to the effect that such counsel has reviewed such expenses and that
such expenses are reasonable in such counsel's view, then such expenses shall be
deemed reasonable in the absence of clear and convincing evidence to the
contrary. By execution of this Agreement, Indemnitee shall be deemed to have
made whatever undertaking may be required by law at the time of any advancement
of Expenses with respect to repayment to the Corporation of such Expenses. In
the event that the Corporation shall breach its obligation to advance Expenses
under this Section 3, the parties hereto agree that Indemnitee's remedies
available at law would not be adequate and that Indemnitee would be entitled to
specific performance.
(b) LETTER OF CREDIT. In order to secure the obligations of the
Corporation to indemnify and advance Expenses to Indemnitee pursuant to this
Agreement, the Corporation shall obtain at the time of any Change in Control an
irrevocable standby letter of credit naming Indemnitee as the sole beneficiary
(the "Letter of Credit"). The Letter of Credit shall be in an appropriate
amount not less than one million dollars ($1,000,000), shall be issued by a
commercial bank headquartered in the United States having assets in excess of
$10 billion and capital according to its most recent published reports equal to
or greater than the then applicable minimum capital standards promulgated by
such bank's primary federal regulator and shall contain terms and conditions
reasonably acceptable to Indemnitee. The Letter of Credit shall provide that
Indemnitee may from time to time draw certain amounts thereunder, upon written
certification by Indemnitee to the issuer of the Letter of Credit that
(i) Indemnitee has made written request upon the Corporation for an amount not
less than the amount he is drawing under the Letter of Credit and that the
Corporation has failed or refused to provide him with such amount in full within
thirty (30) days after receipt of the request, and (ii) Indemnitee believes that
he is entitled under the terms of this Agreement to the amount which he is
drawing upon under the Letter of Credit. The issuance of the Letter of Credit
shall not in any way diminish the Corporation's obligation to indemnify
Indemnitee against Expenses and Liabilities to the full extent required by this
Agreement.
(c) TERM OF LETTER OF CREDIT. Once the Corporation has obtained the
Letter of Credit, the Corporation shall maintain and renew the Letter of Credit
or a substitute letter of credit meeting the criteria of Section 3(b) during the
term of this Agreement so that the Letter of Credit shall have an initial term
of five years, be renewed for successive five-year terms, and always have at
least one year of its term remaining.
4. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. Upon making a request
for indemnification, Indemnitee shall be presumed to be entitled to
indemnification under this Agreement and the Corporation shall have the burden
of proof to overcome that presumption in reaching any contrary determination.
The termination of any Proceeding by judgment, order, settlement, arbitration
award or conviction, or upon a plea of nolo contendere or its equivalent shall
not affect this presumption or, except as determined by a judgment or other
final adjudication adverse to Indemnitee, establish a presumption with regard to
any factual matter relevant to determining Indemnitee's rights to
indemnification hereunder. If the person or persons so empowered to make a
determination pursuant to Section 5 hereof shall have failed to make the
requested determination within ninety (90) days after any judgment, order,
settlement, dismissal, arbitration award, conviction, acceptance of a plea of
nolo contendere or its equivalent, or other disposition or partial disposition
of any Proceeding or any other event which could enable the Corporation to
determine Indemnitee's entitlement to indemnification, the requisite
determination that Indemnitee is entitled to indemnification shall be deemed to
have been made.
5. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) Whenever Indemnitee believes that he is entitled to indemnification
pursuant to this Agreement, Indemnitee shall submit a written request for
indemnification to the Corporation. Any request for indemnification shall
include sufficient documentation or information reasonably available to
Indemnitee for the determination of entitlement to indemnification. In any
event, Indemnitee shall submit his claim for indemnification within a reasonable
time, not to exceed five years after any judgment, order, settlement, dismissal,
arbitration award, conviction, acceptance of a plea of nolo contendere or its
equivalent, or final termination, whichever is the later date for which
Indemnitee requests indemnification. The Secretary or other appropriate officer
shall, promptly upon receipt of Indemnitee's request for indemnification, advise
the Board of Directors in writing that Indemnitee has made such request.
Determination of Indemnitee's entitlement to indemnification shall be made not
later than thirty (30) days after the Corporation's receipt of his written
request for such indemnification, provided that any request for indemnification
for Liabilities, other than amounts paid in settlement, shall have been made
after a determination thereof in a Proceeding.
(b) The Corporation shall be entitled to select the forum in which
Indemnitee's entitlement to indemnification will be heard; provided, however,
that if there is a Change in Control of the Corporation, Independent Legal
Counsel shall determine whether Indemnitee is entitled to indemnification. The
forum shall be any one of the following:
(i) the stockholders of the Corporation;
(ii) a majority vote of Disinterested Directors (as hereinafter defined),
even though less than a quorum;
(iii) Independent Legal Counsel, whose determination shall be made in a
written opinion; or
(iv) a panel of three arbitrators, one selected by the Corporation, another
by Indemnitee and the third by the first two arbitrators; or if for any reason
three arbitrators are not selected within thirty (30) days after the appointment
of the first arbitrator, then selection of additional arbitrators shall be made
by the American Arbitration Association. If any arbitrator resigns or is unable
to serve in such capacity for any reason, the American Arbitration Association
shall select his replacement. The arbitration shall be conducted pursuant to
the commercial arbitration rules of the American Arbitration Association now in
effect.
6. SPECIFIC LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything in
this Agreement to the contrary, the Corporation shall not be obligated under
this Agreement to make any payment to Indemnitee with respect to any Proceeding:
(a) To the extent that payment is actually made to Indemnitee under any
insurance policy, or is made to Indemnitee by the Corporation or an affiliate
otherwise than pursuant to this Agreement. Notwithstanding the availability of
such insurance, Indemnitee also may claim indemnification from the Corporation
pursuant to this Agreement by assigning to the Corporation any claims under such
insurance to the extent Indemnitee is paid by the Corporation;
(b) Provided there has been no Change in Control, for Liabilities in
connection with Proceedings settled without the Corporation's consent, which
consent, however, shall not be unreasonably withheld;
(c) For an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Corporation within the meaning of section 16(b)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
similar provisions of any state statutory or common law;
(d) To the extent it would be otherwise prohibited by law, if so
established by a judgment or other final adjudication adverse to Indemnitee.
7. FEES AND EXPENSES OF INDEPENDENT LEGAL COUNSEL. The Corporation
agrees to pay the reasonable fees and expenses of Independent Legal Counsel or a
panel of three arbitrators should such Counsel or such arbitrators be retained
to make a determination of Indemnitee's entitlement to indemnification pursuant
to Section 5(b) of this Agreement, and to fully indemnify such Counsel or
arbitrators against any and all expenses and losses incurred by any of them
arising out of or relating to this Agreement or their engagement pursuant
hereto.
8. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination pursuant to Section 5 hereof is
made that Indemnitee is not entitled to indemnification, (ii) advances of
Expenses are not made pursuant to this Agreement, (iii) payment has not been
timely made following a determination of entitlement to indemnification pursuant
to this Agreement, or (iv) Indemnitee otherwise seeks enforcement of this
Agreement, Indemnitee shall be entitled to a final adjudication in the Court of
Chancery of the State of Delaware of the remedy sought. Alternatively, unless
(i) the determination was made by a panel of arbitrators pursuant to Section
5(b)(iv) hereof, or (ii) court approval is required by law for the
indemnification sought by Indemnitee, Indemnitee at his option may seek an award
in arbitration to be conducted by a single arbitrator pursuant to the commercial
arbitration rules of the American Arbitration Association now in effect, which
award is to be made within ninety (90) days following the filing of the demand
for arbitration. The Corporation shall not oppose Indemnitee's right to seek
any such adjudication or arbitration award. In any such proceeding or
arbitration Indemnitee shall be presumed to be entitled to indemnification and
advancement of Expenses under this Agreement and the Corporation shall have the
burden of proof to overcome that presumption.
(b) In the event that a determination that Indemnitee is not entitled to
indemnification, in whole or in part, has been made pursuant to Section 5
hereof, the decision in the judicial proceeding or arbitration provided in
paragraph (a) of this Section 8 shall be made DE NOVO and Indemnitee shall not
be prejudiced by reason of a determination that he is not entitled to
indemnification.
(c) If a determination that Indemnitee is entitled to indemnification has
been made pursuant to Section 5 hereof, or is deemed to have been made pursuant
to Section 4 hereof or otherwise pursuant to the terms of this Agreement, the
Corporation shall be bound by such determination in the absence of a
misrepresentation of a material fact by Indemnitee in connection with such
determination.
(d) The Corporation shall be precluded from asserting that the procedures
and presumptions of this Agreement are not valid, binding and enforceable. The
Corporation shall stipulate in any such court or before any such arbitrator that
the Corporation is bound by all the provisions of this Agreement and is
precluded from making any assertion to the contrary.
(e) Expenses reasonably incurred by Indemnitee in connection with his
request for indemnification under, seeking enforcement of or to recover damages
for breach of this Agreement shall be borne by the Corporation when and as
incurred by Indemnitee irrespective of any Final Adverse Determination that
Indemnitee is not entitled to indemnification.
9. CONTRIBUTION. To the fullest extent permissible under applicable law,
if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Corporation, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such 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
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).
10. MAINTENANCE OF INSURANCE. Upon the Corporation's purchase of
directors' and officers' liability insurance policies covering its directors and
officers, then, subject only to the provisions within this Section 10, the
Corporation agrees that so long as Indemnitee shall have consented to serve or
shall continue to serve as a director or officer of the Corporation or both, or
as an Agent of the Corporation, and thereafter so long as Indemnitee shall be
subject to any possible Proceeding (such periods being hereinafter sometimes
referred to as the "Indemnification Period"), the Corporation will use its best
efforts to maintain in effect for the benefit of Indemnitee one
or more valid, binding and enforceable policies of directors' and officers'
liability insurance providing, in all respects, coverage both in scope and
amount which is no less favorable than that provided by such preexisting
policies. Notwithstanding the foregoing, the Corporation shall not be required
to purchase or maintain said policies of directors' and officers' liability
insurance if such insurance is not reasonably available or if it is in good
faith determined by the then directors of the Corporation either that:
(i) The premium cost of maintaining such insurance is substantially
disproportionate to the amount of coverage provided thereunder; or
(ii) The protection provided by such insurance is so limited by exclusions,
deductions or otherwise that there is insufficient benefit to warrant the cost
of maintaining such insurance.
Anything in this Agreement to the contrary notwithstanding, to the extent
that and for so long as the Corporation shall choose to continue to maintain any
policies of directors' and officers' liability insurance during the
Indemnification Period, the Corporation shall maintain similar and equivalent
insurance for the benefit of Indemnitee during the Indemnification Period
(unless such insurance shall be less favorable to Indemnitee than the
Corporation's existing policies).
11. MODIFICATION, WAIVER, TERMINATION AND CANCELLATION. No supplement,
modification, termination, cancellation 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 provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver.
12. SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of 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 Corporation effectively to
bring suit to enforce such rights.
13. NOTICE BY INDEMNITEE AND DEFENSE OF CLAIM. Indemnitee shall promptly
notify the Corporation in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
matter, whether civil, criminal, administrative or investigative, but the
omission so to notify the Corporation will not relieve it from any liability
which it may have to Indemnitee if such omission does not prejudice the
Corporation's rights. If such omission does prejudice the Corporation's rights,
the Corporation will be relieved from liability only to the extent of such
prejudice; nor will such omission relieve the Corporation from any liability
which it may have to Indemnitee otherwise than under this Agreement. With
respect to any Proceeding as to which Indemnitee notifies the Corporation of the
commencement thereof:
(a) The Corporation will be entitled to participate therein at its own
expense; and
(b) The Corporation jointly with any other indemnifying party similarly
notified will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee; provided, however, that the Corporation shall not be
entitled to assume the defense of any Proceeding if there has been a Change in
Control or if Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Corporation and Indemnitee with respect to such
Proceeding. After notice from the Corporation to Indemnitee of its election to
assume the defense thereof, the Corporation will not be liable to Indemnitee
under this Agreement for any Expenses subsequently incurred by Indemnitee in
connection with the defense thereof, other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the right
to employ its own counsel in such Proceeding, but the fees and expenses of such
counsel incurred after notice from the Corporation of its assumption of the
defense thereof shall be at the expense of Indemnitee unless:
(i) the employment of counsel by Indemnitee has been authorized by the
Corporation;
(ii) Indemnitee shall have reasonably concluded that counsel engaged by the
Corporation may not adequately represent Indemnitee; or
(iii) the Corporation shall not in fact have employed counsel to assume the
defense in such Proceeding or shall not in fact have assumed such defense and be
acting in connection therewith with reasonable diligence;
in each of which cases the fees and expenses of such counsel shall be at the
expense of the Corporation.
(c) The Corporation shall not settle any Proceeding in any manner which
would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent; provided, however, that Indemnitee will not unreasonably
withhold his consent to any proposed settlement.
14. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
(i) delivered by hand and receipted for by the party to whom said notice or
other communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to:
c/o Track 'n Trail, Inc.
0000-X Xxxxxxxx Xxxxx
Xx Xxxxxx Xxxxx, XX 00000
(b) If to the Corporation, to:
Track 'n Trail, Inc.
0000-X Xxxxxxxx Xxxxx
Xx Xxxxxx Xxxxx, XX 00000
Attn: Secretary
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
15. NONEXCLUSIVITY. The rights of Indemnitee hereunder shall not be
deemed exclusive of any other rights to which Indemnitee may be entitled under
applicable law, the Corporation's Certificate of Incorporation or By-laws, or
any agreements, vote of stockholders, resolution of the Board of Directors or
otherwise, and to the extent that during the Indemnification Period the rights
of the then existing directors and officers are more favorable to such directors
or officers than the rights currently provided to Indemnitee thereunder or under
this Agreement, Indemnitee shall be entitled to the full benefits of such more
favorable rights.
16. PRONOUNS. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate.
17. CERTAIN DEFINITIONS.
(a) "AGENT" shall mean any person who is or was, or who has consented to
serve as, a director, officer, employee, agent, fiduciary, joint venturer,
partner, manager or other official of the Corporation or a subsidiary or an
affiliate of the Corporation, or any other entity (including without limitation,
an employee benefit plan) either at the request of, for the convenience of, or
otherwise to benefit the Corporation or a subsidiary of the Corporation.
(b) "CHANGE IN CONTROL" shall mean the occurrence of any of the following:
(i) Both (A) any "person" (as defined below) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing at least 15% of the
total voting power represented by the Corporation's then outstanding voting
securities; and (b) the beneficial ownership by such person of securities
representing such percentage has not been approved by a majority of the
"continuing directors" (as defined below); or
(ii) Any "person" (as defined below) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing at least 50% of the total voting
power represented by the Corporation's then outstanding voting securities; or
(iii) A change in the composition of the Board occurs, as a result of which
fewer than two-thirds of the incumbent directors are directors who either
(A) had been directors of the
Corporation on the "look-back date" (as defined below) (the "Original
Directors") or (B) were elected, or nominated for election, to the Board with
the affirmative votes of at least a majority in the aggregate of the Original
Directors who were still in office at the time of the election or nomination and
directors whose election or nomination was previously so approved (the
"continuing directors"); or
(iv) The stockholders of the Corporation approve a merger or consolidation
of the Corporation with any other corporation, if such merger or consolidation
would result in the voting securities of the Corporation outstanding immediately
prior thereto representing (either by remaining outstanding or by being
converted into voting securities of the surviving entity) 50% or less of the
total voting power represented by the voting securities of the Corporation or
such surviving entity outstanding immediately after such merger or
consolidation; or
(v) The stockholders of the Corporation approve (A) a plan of complete
liquidation of the Corporation or (B) an agreement for the sale or disposition
by the Corporation of all or substantially all of the Corporation's assets.
For purposes of Subsection (i) above, the term "person" shall have the same
meaning as when used in sections 13(d) and 14(d) of the Exchange Act, but shall
exclude (x) a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or of a parent or subsidiary of the Corporation
or (y) a corporation owned directly or indirectly by the stockholders of the
Corporation in substantially the same proportions as their ownership of the
common stock of the Corporation.
For purposes of Subsection (iii) above, the term "look-back date" shall
mean the later of (x) April 7, 1997 or (y) the date 24 months prior to the date
of the event that may constitute a "Change in Control."
Any other provision of this Section 17(b) notwithstanding, the term "Change
in Control" shall not include a transaction, if undertaken at the election of
the Corporation, the result of which is to sell all or substantially all of the
assets of the Corporation to another corporation (the "surviving corporation");
provided that the surviving corporation is owned directly or indirectly by the
stockholders of the Corporation immediately following such transaction in
substantially the same proportions as their ownership of the Corporation's
common stock immediately preceding such transaction; and provided, further, that
the surviving corporation expressly assumes this Agreement.
(c) "DISINTERESTED DIRECTOR" shall mean a director of the Corporation who
is not or was not a party to or otherwise involved in the Proceeding in respect
of which indemnification is being sought by Indemnitee.
(d) "EXPENSES" shall include all direct and indirect costs (including,
without limitation, attorneys' fees, retainers, court costs, transcripts, fees
of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, all other disbursements or out-of-pocket
expenses and reasonable compensation for time spent by Indemnitee for which he
is otherwise not compensated by the Corporation or any third party) actually and
reasonably incurred in connection with either the investigation, defense,
settlement or appeal of a Proceeding or establishing or enforcing a right to
indemnification under this Agreement, applicable law or otherwise; provided,
however, that "Expenses" shall not include any Liabilities.
(e) "FINAL ADVERSE DETERMINATION" shall mean that a determination that
Indemnitee is not entitled to indemnification shall have been made pursuant to
Section 5 hereof and either (1) a final adjudication in the Court of Chancery of
the State of Delaware or decision of an arbitrator pursuant to Section 8(a)
hereof shall have denied Indemnitee's right to indemnification hereunder, or
(2) Indemnitee shall have failed to file a complaint in a Delaware court or seek
an arbitrator's award pursuant to Section 8(a) for a period of one hundred
twenty (120) days after the determination made pursuant to Section 5 hereof.
(f) "INDEPENDENT LEGAL COUNSEL" shall mean a law firm or a member of a
firm selected by the Corporation and approved by Indemnitee (which approval
shall not be unreasonably withheld) or, if there has been a Change in Control,
selected by Indemnitee and approved by the Corporation (which approval shall not
be unreasonably withheld), that neither is presently nor in the past five years
has been retained to represent: (i) the Corporation or any of its subsidiaries
or affiliates, or Indemnitee or any corporation of which Indemnitee was or is a
director, officer, employee or agent, or any subsidiary or affiliate of such a
corporation, in any material matter, or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Legal Counsel" shall not include any person
who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Corporation or
Indemnitee in an action to determine Indemnitee's right to indemnification under
this Agreement.
(g) "LIABILITIES" shall mean liabilities of any type whatsoever including,
but not limited to, any judgments, fines, ERISA excise taxes and penalties,
penalties and amounts paid in settlement (including all interest assessments and
other charges paid or payable in connection with or in respect of such
judgments, fines, penalties or amounts paid in settlement) of any Proceeding.
(h) "PROCEEDING" shall mean any threatened, pending or completed action,
claim, suit, arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding whether civil, criminal,
administrative or investigative, that is associated with Indemnitee's being an
Agent of the Corporation.
18. BINDING EFFECT; DURATION AND SCOPE OF AGREEMENT. This Agreement shall
be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors and assigns
(including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the
Corporation), spouses, heirs and personal and legal representatives. This
Agreement shall continue in effect during the Indemnification Period, regardless
of whether Indemnitee continues to serve as an Agent.
19. SEVERABILITY. If any provision or provisions of this Agreement (or
any portion thereof) shall be held to be invalid, illegal or unenforceable for
any reason whatsoever:
(a) The validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby; and
(b) To the fullest extent legally possible, the provisions of this
Agreement shall be construed so as to give effect to the intent of any provision
held invalid, illegal or unenforceable.
20. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
within the State of Delaware, without regard to conflict of laws rules.
21. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties hereto, and there are no other agreements, contracts or
understandings between the parties hereto with respect to the subject matter of
this Agreement, except as specifically referred to herein or as provided in
Section 15 hereof.
Executed as of the ____ day of _________, 1997.
TRACK 'n TRAIL, INC.
By
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INDEMNITEE
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