XXXX Industries, Inc. has entered into an Indemnification Agreement with
the following persons in the form that follows:
Name Date
Xxxxxxx X. Xxxxxx May 18, 1999
Xxxxxxx X. Xxxxxx September 10, 1999
Xxxx X. Xxxxx, Xx. Xxx 00, 0000
Xxxx Locks May 18, 1999
Xxxxx X. Xxxxxxxxx May 18, 1999
Xxxxxx Xxxxxxxx November 23, 1999
Xxxx Xxxxxxxx May 18, 1999
Xxxxx X. Xxxx May 18, 1999
Xxxxxx X. Xxxxxx, III May 18, 1999
Xxxxxxx X. Xxxxxxxxx May 18, 1999
Xxxxxxx X. Xxxx May 18, 1999
Xxxxx X. Xxxxxx June 19, 2000
X.X. Xxxxxxx III June 26, 2000
Xxxx X. Xxxxx July 31, 2000
Xxxxxx Xxxx December 8, 2000
Xxxxx X. Xxxxxxx December 8, 2000
[XXXX INDUSTRIES INC. LOGO]
INDEMNIFICATION AGREEMENT
THIS AGREEMENT, made and entered into this ___ th day of ____________,
20__ ("Agreement"), by and between XXXX Industries, Inc. a Delaware corporation
("Corporation", which term shall include one or more of its subsidiaries where
appropriate), and ____________________ ("Indemnitee"):
WHEREAS, highly competent persons are becoming more reluctant to serve
corporations as directors or officers or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to, and activities on behalf of, such corporations; and
WHEREAS, the current impracticability of obtaining adequate insurance
and the uncertainties relating to indemnification have increased the difficulty
of attracting and retaining such persons;
WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined that the difficulty in attracting and retaining such persons is
detrimental to the best interests of the Corporation's stockholders and that the
Corporation should act to assure such persons that there will be increased
certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Corporation
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Corporation free from undue concern that they will not be so indemnified; and
WHEREAS, Indemnitee is willing to serve, continue to serve and/or to
undertake additional service for or on behalf of the Corporation on the
condition that he be so indemnified; and
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NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:
1. SERVICES BY INDEMNITEE. Indemnitee agrees to serve or continue to
serve as a director and/or officer of the Corporation. This Agreement shall
not impose any obligation on the Indemnitee or the Corporation to continue
the Indemnitee's position with the Corporation beyond any period otherwise
applicable.
2. GENERAL. The Corporation shall indemnify Indemnitee for, and hold
Indemnitee harmless from and against, any Losses or Expenses (as hereinafter
defined) at any time incurred by or assessed against Indemnitee arising out
of or in connection with the service of Indemnitee as a director or officer
of the Corporation to the fullest extent permitted by the laws of the State
of Delaware in effect on the date hereof or as such laws may from time to
time hereafter be amended to increase the scope of such permitted
indemnification. Without diminishing the scope of such permitted
indemnification provided by this Section, the rights of indemnification of
Indemnitee provided hereunder shall include but shall not be limited to those
rights set forth hereinafter.
3. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE
CORPORATION. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by reason of (a) his Corporate Status (as
hereinafter defined) or (b) anything done or not done by Indemnitee in any
such capacity, he, was or is, or is threatened to be made, a party to any
Proceeding (as hereinafter defined) or is involved (including, without
limitation as a witness) in an Proceeding, other than a Proceeding by or in
the right of the Corporation. Pursuant to this Section 3, Indemnitee shall be
indemnified against all Losses and Expenses actually and reasonably incurred
by him or on his behalf in connection with such Proceeding or any claim,
issue or matter therein, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal Proceeding, had no reasonable
cause to believe his conduct was unlawful.
4. PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall
be Entitled to the rights of indemnification provided in this Section 4 if, by
reason of (a) his Corporate Status or (b) anything done or not done by
Indemnitee in any such capacity he was or is, or is threatened to be made, a
party to any, Proceeding brought by or in the right of the Corporation to
procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Losses and Expenses actually and reasonably incurred by
him or on his behalf in connection with the defense or settlement of such
Proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation. Notwithstanding
the foregoing, no indemnification against such Losses or Expenses
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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 if such
indemnification is not permitted by Delaware or other applicable law,
provided, however, that indemnification against all Losses and Expenses shall
nevertheless be made by the Corporation in such event to the extent that the
Court of Chancery of the State of Delaware, or the court in which such
proceeding shall have been brought or is pending, shall determine.
5. INDEMNIFICATION FOR LOSSES AND EXPENSES OF A PARTY WHO IS WHOLLY
OR PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement,
to the extent that Indemnitee is, by reason of (a) his Corporate Status or
(b) anything done or not done by Indemnitee in any such capacity, a party to
and is wholly successful, on the merits or otherwise, in any Proceeding, he
shall be indemnified against all Losses and Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If Indemnitee is
not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in
such proceeding, the Corporation shall indemnify Indemnitee to the maximum
extent permitted by law against all Losses and Expenses actually and
reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. In any review or Proceeding to
determine the extent of indemnification, the Corporation shall bear the
burden of proving any lack of success and which amounts sought in indemnity
are allocable to claims, issue or matters which were not successfully
resolved. For purposes of this Section 5 and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal
or withdrawal with or without prejudice, shall be deemed to be a successful
result as to such claims, issue or matter.
6. PAYMENT FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of
his Corporate Status, a witness in any Proceeding, the Corporation agrees to
pay to Indemnitee all Expenses actually and reasonably incurred by Indemnitee
or on Indemnitee's behalf in connection therewith.
7. ADVANCEMENT OF EXPENSES. The Corporation shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee (or reasonably
expected by Indemnitee to be incurred by Indemnitee within three months) in
connection with any Proceeding within twenty (20) days after the receipt by the
Corporation of a statement or statements from Indemnitee requesting such advance
or advances from time to time, whether prior to or after final disposition of
such Proceeding, whether or not a determination to indemnify has been made under
Section 8. Indemnitee's entitlement to such advancement of Expenses shall
include those incurred in connection with any Proceeding by Indemnitee seeking
an adjudication or award in arbitration pursuant to this Agreement. The
financial ability of Indemnitee to repay an advance shall not be a prerequisite
to the making of such advance. Such statement or statements shall
3
reasonably evidence the Expenses (which shall not include in any case the
right of indemnitee to receive payments pursuant to Section 6 and Section 7
hereof, which shall not be subject to this Section 8), incurred (or
reasonably expected to be incurred) by Indemnitee in connection therewith and
shall include or be preceded or accompanied by an undertaking by or on behalf
of Indemnitee to repay any Expenses advanced if it shall ultimately be
determined pursuant to the terms of this agreement that Indemnitee is not
entitled to be indemnified against such Expenses. Unpaid expenses shall bear
interest accruing at the prime rate of interest from the twenty-first (21)
day after receipt by the Corporation of such statement until said expenses
are paid.
8. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) To obtain indemnification under this Agreement, Indemnitee shall
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. Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but
in no event later than 60 days after receipt by the Corporation of
Indemnitee's written request for indemnification. The Secretary of the
Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board and counsel for the Corporation in
writing the Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 8(a) hereof, a determination, if required by applicable law,
with respect to Indemnitee's entitlement thereto shall be made in the
specific case: (i) if a Change in Control (as hereinafter defined)
shall have occurred, by Independent Counsel (as hereinafter defined) in
a written opinion to the Board, a copy of which shall be delivered to
Indemnitee (unless Indemnitee shall request that such determination be
made by the Board or the stockholders, in which case the determination
shall be made in the manner provided below in clause (ii) or (iii);
(ii) if a Change of Control shall not have occurred, (A) by the Board
by a majority vote even though less than a quorum consisting of
Disinterested Directors (as hereinafter defined), (B) by a committee of
such directors designated by majority vote of such directors, even
though less than a quorum (B) if there are no such directors or if
directors so directs, by Independent Counsel in a written opinion to
the Board, a copy of which shall be delivered to Indemnitee, or (C) by
the stockholders of the Corporation; or (iii) as provided in Section
9(b) of this Agreement; and, if it is so determined that Indemnitee is
entitled to the indemnification, payment to Indemnitee shall be made
within ten (10) days after such determination. Indemnitee shall
cooperate with the person, persons or entity making such determination
with respect to Indemnitee's entitlement to indemnification, including
providing to such person, persons or entity upon
4
reasonable advance request any documentation or information that is
not privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating shall be borne
by the Corporation (irrespective of the determination as to
Indemnitee's entitlement to indemnification) and the Corporation hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(c) If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 8(b) of this Agreement,
the Independent Counsel shall be selected as provided in this Section
8(c). If a Change of Control shall not have occurred, the Independent
Counsel shall be selected by the Board, and the Corporation shall give
written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. If a Change of Control shall have
occurred, the Independent Counsel shall be selected by Indemnitee
(unless Indemnitee shall request that such selection be made by the
Board, in which event the preceding sentence shall apply), and
Indemnitee shall give written notice to the Corporation advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Corporation, as the case may be, may, within seven
(7) days after such written notice of selection shall have been given,
deliver to the Corporation or to Indemnitee, as the case may be, a
written objection to such selection. Such objection may be asserted
only on the ground that the Independent Counsel so selected does not
meet the requirement of "Independent Counsel" as defined in Section 15
of this Agreement, and the objection shall set forth with particularly
the factual basis of such assertion. If such written objection is made,
the Independent Counsel so selected may not serve as Independent
Counsel unless and until a court has determined that such objection is
without merit. If, within twenty (20) days after submission by
Indemnitee of a written request for indemnification pursuant to Section
8(a) of this Agreement, no Independent Counsel shall have been selected
or, if selected, shall have been objected to, in accordance with this
Section 8(c), either the Corporation or Indemnitee may petition the
Court of Chancery of the State of Delaware or other court or competent
jurisdiction for resolution of any objection that shall have been made
by the Corporation or Indemnitee to the other's selection of
Independent Counsel of a person selected by the Court or by such other
person as the Court shall designate, and the person with respect to
whom an objection is favorably resolved or the person as so appointed
shall act as Independent Counsel under Section 8(b) of this Agreement.
The Corporation shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection
with acting pursuant to Section 8(b) of this Agreement, and the
Corporation shall pay all reasonable fees and expenses incident to the
5
procedures of this Section 8(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due
commencement of any judicial proceeding or arbitration pursuant to
Section 10(a)(iii) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then
prevailing).
9. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder,
the person, persons or entity making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance
with Section 8(a) of this Agreement, and the Corporation shall have the
burden of proof to overcome that presumption in connection with the
making by any person, persons or entity of any determination contrary
to that presumption.
(b) If the person, persons or entity empowered or selected under
Section 7 of this Agreement to determine whether Indemnitee is entitled
to indemnification shall not have made such determination within sixty
(60) days after receipt by the Corporation of the request therefor, the
requisite determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such sixty-day period may be
extended for a reasonable time, not to exceed an additional thirty (30)
days, if the person, persons or entity making the determination with
respect to entitlement to indemnification in good faith requires such
additional time for the obtaining or evaluating of documentation and/or
information relating thereto; and provided, further, that the foregoing
provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 8(b) of this Agreement and if (A)
within fifteen (15) days after receipt by the Corporation of the
request such determination the Board has resolved to submit such
determination to the stockholders for their consideration at an annual
meeting thereof to be held within seventy-five (75) days after such
receipt and such determination is made threat, or (B) a special meeting
of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for
such purpose within sixty (60) days after having been so called and
such determination of entitlement is made thereat, or (ii) if the
determination of entitlement to
6
indemnification is to be made by Independent Counsel pursuant to
Section 8(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, shall not (except
as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification hereunder or create a
presumption that Indemnitee did not act in good faith and in a manner
that he reasonably believed to be in or not opposed to the best
interests of the Corporation or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that his
conduct wads unlawful.
(d) For purposes of any determination of good faith hereunder,
Indemnitee shall be deemed to have acted in good faith if in taking
such action Indemnitee relied on the records or books of account of the
Corporation, including financial statements, or on information supplied
to Indemnitee by the officers of the Corporation in the course of their
duties, or on the advice of legal counsel for the Corporation or on
information or records given or reports made to the Corporation by an
independent certified public accountant or by an appraiser or other
expert selected with reasonable care to the Corporation. The
Corporation shall have the burden of establishing the absence of good
faith. The provisions of this Section 9(d) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which
Indemnitee may be deemed to have met the applicable standard of conduct
set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any other
director, officer, agent or employee of the Corporation shall not be
imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.
10. REMEDIES OF INDEMNITEE.
(a) If (i) a determination is made pursuant to Section 8 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 7 of this Agreement, (iii) the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 8(b) of this Agreement and such determination shall not have
been made and delivered in a written opinion within ninety (90) days
after receipt by the Corporation of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5 of
this Agreement within ten (10) days after receipt by the Corporation of
a written request therefor or (v) payment of indemnification or such
determination is deemed to have been made pursuant to Section 9 of this
Agreement, Indemnitee shall be entitled to a final adjudication in an
appropriate court of the
7
State of Delaware, or in any other court of competent jurisdiction,
of his entitlement to such indemnification or advancement of Expenses.
Alternatively, Indemnitee, at his option, may seek an award in
arbitration to be conducted by a single arbitrator, which arbitrator
shall be a member of the bar in the State of Illinois, pursuant to the
rules of the American Arbitration Association. Indemnitee shall
commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this
Section 10(a). The Corporation shall not oppose Indemnitee's right to
any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 8 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced
pursuant to this Section 10 shall be conducted in all respects as a de
novo trial, or arbitration, on the merits and Indemnitee shall not be
prejudiced by reason of that adverse determination. Regardless of
whether a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9 the
Corporation shall have the burden of proving that Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may
be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 8 or 9 of this Agreement that Indemnitee is
entitled to indemnification, the Corporation shall be bound by such
determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of
a material fact, or an omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with
the request for indemnification or (ii) a prohibition of such
indemnification under applicable law.
(c) The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that
the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Corporation is bound by all the provisions
of this Agreement.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall
be entitled to recover from the Corporation, and shall be indemnified
by the Corporation against, any and all expenses (of the types
described in the definition of Expenses in Section 14 of this
Agreement) actually and reasonably incurred by him in such judicial
adjudication or arbitration, but only if he prevails therein. If it
shall be
8
determined in said judicial adjudication or arbitration that
Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the expenses
incurred by Indemnitee in connection with such judicial adjudication or
arbitration shall be appropriately prorated.
11. SECURITY
(a) To the extent requested by the Indemnitee and approved by the
Board, the Corporation may at any time and from time to time provide
security to the Indemnitee for the Corporation's obligations hereunder
through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to the Indemnitee, may not
be revoked or released without the prior written consent of Indemnitee.
(b) For each Proceeding in which Indemnitee is entitled to
indemnification, the Corporation, at the time such Proceeding is
commenced, shall deposit a minimum of One Million Dollars ($1,000,000)
in an escrow account to fund any Losses or Expenses for or on behalf of
Indemnitee pursuant to this Agreement. In the event a single Proceeding
involves more than one Indemnitee, only one such escrow account shall
be established with respect to such Proceeding. The Corporation shall
maintain a minimum balance in each such escrow account of One Million
Dollars ($1,000,000) and shall increase such amount from time to time
as it shall deem necessary or desirable to meet the Corporation's
anticipated obligations in connection with such Proceeding, pursuant to
this Agreement. The amount deposited by the Corporation in any such
escrow account shall not limit the Corporation's liability under this
Agreement. At the termination of any such Proceeding, after payment of
all Losses and Expenses, judgments, fines or settlement amounts, the
balance of funds remaining in the escrow account established for such
Proceeding shall be returned to the Corporation for its general
purposes and such escrow account shall be closed.
12. NON-EXCLUSIVITY; DURATION OF AGREEMENT; INSURANCE; SUBROGATION.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive at
any other rights to which Indemnitee may at any time be entitled under
applicable law, the Corporation's certificate of incorporation or
bylaws, any other agreement, a vote of stockholders or a resolution of
directors, or otherwise both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such
office. To the extent Indemnitee would be prejudiced thereby, no
amendment, alteration, rescission or replacement of this Agreement or
any provision hereof shall be effective as to Indemnitee with respect
to any action taken or omitted by such Indemnitee in Indemnitee's
position with the
9
Corporation or any other entity which Indemnitee is or was serving at
the request of the Corporation prior to such amendment, alteration,
rescission or replacement. This Agreement shall continue until and
terminate upon the latter of: (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director and officer of the
Corporation or as an officer, employee, agent or fiduciary of the
Corporation or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise that Indemnitee
served at the request of the Corporation; or (b) one year after the
final termination of all pending or threatened Proceedings in respect
of which Indemnitee is granted rights of indemnification or advancement
of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 9 of this Agreement relating thereto. This
Agreement shall be binding upon the Corporation and its successors and
assigns and shall inure to the benefit of Indemnitee and his heirs,
executors and administrators.
(b) If the Corporation maintains an insurance policy or policies
providing liability insurance for directors or officers of the
Corporation of fiduciaries of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise that such
person serves at the request of the Corporation, Indemnitee shall be
covered by such policy or policies in accordance with the terms thereof
to the maximum extent of the coverage available for any such director
or officer under such policy or policies.
(c) If any payment is made 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 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.
(d) The Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the
extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under any
insurance policy, contact, agreement or otherwise.
13. SEVERABILITY. If any provision or provisions of this Agreement
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 (including, without limitation, each portion of any Section of
this Agreement containing any such provision held to invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to
be
10
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
14. EXCEPTION TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any claim, issue or matter therein, brought or
made by him against the Corporation, except as may be provided in Section 9(e)
of this Agreement.
15. DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:
(a) "Change in Control" means a change in control of the Corporation of
a nature that would be required to be reported in response to Item 5(f)
of Schedule 14A of Regulation 14A (or in response to any similar item
or any similar schedule or form) promulgated under the Securities
Exchange Act of 1934, as amended (the "Act"), whether or not the
Corporation is then subject to such reporting requirement; provided,
however, that, without limitation, such a 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) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 20% or more
of the combined voting power of the Corporation's then outstanding
securities without the prior approval of at least two-thirds of the
members of the Board in office immediately prior to such person
attaining such percentage interest; (ii) the Corporation is a party to
a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board in office
immediately prior to such transaction or event constitute less than a
majority of the Board thereafter; or (iii) during any period of two (2)
consecutive years, individuals who at the beginning of such period
constituted the Board (including for this purpose any new director
whose election or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
such period) cease for any reason to constitute at least a majority of
the Board.
(b) "Corporate Status" describes the status of a person who is or was
or has agreed to become a director of the Corporation, or is or was an
officer, employee, agent or fiduciary of the Corporation or of any
other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise that such person is or was serving at the
request of the Corporation.
(c) "Disinterested Directors" means a director of the Corporation who
is not and
11
was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts and witnesses, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or
expenses of the type customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend or
investigating a Proceeding.
(e) "Fines" shall include any excise taxes assessed on Indemnitee with
respect to any employee benefit plan.
(f) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither at the
time of designation is, nor in the five years immediately preceding
such designation was, retained to represent: (i) the Corporation or
Indemnitee in any matter material to either such party or (ii) any
other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
"Independent 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 rights under this
Agreement arising on or after the date of this Agreement, regardless of
when the Indemnitee's act or failure to act occurred.
(g) "Losses" shall mean all expenses, liabilities, losses and claims
(including attorneys' fees, judgments, fines, excise taxes under the
Employee Retirement Income Security Act of 1974, as amended from time
to time, penalties and amounts to be paid in settlement) incurred in
connection with any Proceeding.
(h) "Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing an any other proceeding
(including any appeals from any of the foregoing) whether civil,
criminal, administrative or investigative, except one initiated by an
Indemnitee pursuant to Section 10 of this Agreement to enforce his
rights under this Agreement.
16. HEADINGS. The headings of the Sections of this Agreement are
inserted for Convenience of reference only and shall not be deemed to constitute
part of this Agreement or to affect the construction thereof.
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17. MODIFICATION AND WAIVER. This Agreement may be amended from time to
time to reflect changes in Delaware law or for other reasons. 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 waiver constitute a
continuing waiver.
18. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the
Corporation in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter that may be subject to indemnification or advancement of Expenses
covered hereunder; provided, however, that the failure to give any such notice
shall not disqualify the Indemnitees from indemnification hereunder.
19. NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i) if
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, at the time of delivery, or (ii) if
mailed by certified mail (return receipt requested) with postage prepaid, on the
third business day after the date on which it is so mailed, and addressed:
(a) if to Indemnitee, to:
----------------------------
@ Address last known to the Corporation
(b) if to the Corporation, to:
XXXX Industries, Inc.
0000 X. Xxxxx Xxxx
Xxxxxx, XX 00000
Attention: Secretary
or to such other address as may have been furnished by like notice to Indemnitee
by the Corporation or to the Corporation by Indemnitee, as the case may be.
20. GOVERNING LAW. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware applicable to contracts made and to be performed in such state
without giving effect to the principles of conflicts of laws.
21. ENTIRE AGREEMENT. Subject to the provisions of Section (12) hereof,
this Agreement constitutes the entire understanding between the parties and
supersedes all
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proposals, commitments, writings, negotiations and understandings, oral and
written, and all other communications between the parties relating to the
subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above set forth.
XXXX Industries, Inc.
By:
-----------------------------------------
Its:
----------------------------------------
Indemnitee
-------------------------------------------
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