EXHIBIT 10.24
DIRECTORS INDEMNIFICATION AGREEMENT
-----------------------------------
THIS INDEMNIFICATION AGREEMENT, dated as of August 16, 1995 ("the
Agreement"), between Xxxxxxx Products, Inc., a Delaware corporation, (the
---------
"Company" or "Indemnitor"), and [Director] (the "Indemnitee").
------- ---------- ----------
WITNESSETH
WHEREAS, highly competent persons are becoming more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance and indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporation; and
WHEREAS, the current difficulties or virtual impossibility of obtaining
adequate insurance and uncertainties relating to indemnification have increased
the difficulty of attracting and retaining such persons; and
WHEREAS, the Board of Directors of the Indemnitor has determined that the
inability to attract and retain such persons is detrimental to the best
interests of the Indemnitor's stockholders and that the Indemnitor should act to
assure such persons that there will be increased certainty of such protection in
the future; and
WHEREAS, it is reasonable, prudent and necessary for the Indemnitor
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
Indemnitor free from undue concern that they will not be so indemnified; and
WHEREAS, this Agreement is being entered into as part of the Indemnitee's
total consideration for serving as a director; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Indemnitor on the condition that he
be so indemnified;
NOW THEREFORE, in consideration of the premises and the covenants contained
herein, the Indemnitor and Indemnitee do hereby covenant and agree as follows:
SECTION 1. Service by Indemnitee.
---------------------
Indemnitee agrees to serve as director of the Indemnitor and agrees to the
indemnification provisions provided for herein. Indemnitee may at any time and
for any reason resign or be terminated from such position (subject to any other
contractual obligation or other obligation imposed by operation of law), in
which event the Indemnitor shall have no obligation under this Agreement to
continue Indemnitee in any such position.
SECTION 2. Indemnification.
---------------
The Indemnitor shall indemnify Indemnitee to the fullest extent permitted
by applicable law in effect on the date hereof or as such laws may from time to
time be amended.
SECTION 3. Action or Proceeding Other Than an Action by or in the Right of
---------------------------------------------------------------
the Indemnitor.
--------------
Indemnitee shall be entitled to the indemnification rights provided in this
Section 3 if he is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative in nature, other than an action by or
in the right of the Indemnitor, by reason of the fact that he is or was a
director, officer, employee, agent or fiduciary of the Indemnitor or is or was
serving at the request of the Indemnitor as a director, officer, employee, agent
or fiduciary of any other entity or by reason of anything done or not done by
him in any such capacity, including, but not limited to, the extent of any
liability, cost, or expense that any director has incurred as a personal obligor
or guarantor for any obligation of the Indemnitor. Pursuant to this Section 3,
Indemnitee shall be indemnified against expenses (including attorney's fees),
costs, judgments, penalties, fines and amounts paid in settlements actually and
reasonably incurred by him in connection with such action, suit or proceeding
(including, but not limited to, the investigation, defense or appeal thereof),
if he acted in good faith and in any manner he reasonably believed to be in or
not opposed to the best interests of the Indemnitor, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful; provided, however, the Indemnitor shall not be obligated to
indemnify the Indemnitee in connection with any actions, suits or proceedings
initiated by the Indemnities if the indemnification relates to any "short-swing"
disgorgement or similar liability arising under Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any rules or regulations promulgated
thereunder.
SECTION 4. Actions by or in the Right of the Company. Indemnitee shall be
-----------------------------------------
entitled to the indemnification rights provided in this Section 4 if he is a
person who was or is made a party or is threatened to be made a party to any
threatened, pending or completed action or suit brought by or in the right of
the Indemnitor to procure a judgment in its favor by reason of the fact that he
is or was a director, officer, employee, agent or fiduciary of the Indemnitor or
is or was serving at the request of the Indemnitor as a director, officer,
-2-
employee, agent or fiduciary of any other entity by reason of anything done or
not done by him in any such capacity. Pursuant to this Section 4, Indemnitee
shall be indemnified against expenses (including attorney's fees) and costs
actually and reasonably incurred by him in connection with such action or suit
(including, but not limited to the investigation, defense, settlement or appeal
thereof) 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 Indemnitor; provided, however,
that no such indemnification shall be made in respect of any claim, issue or
matter as to which applicable law expressly prohibits such indemnification by
reason of an adjudication of liability of Indemnitee to the Indemnitor, unless,
and only to the extent that, the Court of Chancery of the State of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite such adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnification for such expenses and costs as such court shall deem proper.
SECTION 5. Indemnification for Costs, Charges and Expenses of Successful
-------------------------------------------------------------
Party.
-----
Notwithstanding the other provisions of this Agreement, to the extent that
Indemnitee has served as a witness on behalf of the Indemnitor or has been
successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit or
proceeding referred to in Section 3 and 4 hereof, or in defense of any claim,
issue or matter therein, he shall be indemnified against all costs, charges and
expenses (including attorneys' fees) actually and reasonably incurred by him or
on his behalf in connection therewith.
SECTION 6. Partial Indemnification.
-----------------------
If Indemnitee is only partially successful in the defense, investigation,
settlement or appeal of any action, suit, investigation or proceeding described
in Section 3 or 4 hereof, and as a result is not entitled under Section 5 hereof
to indemnification by the Indemnitor for the total amount of the expenses
(including attorneys' fees), costs, judgments, penalties, fines and amounts paid
in settlement actually and reasonably incurred by him, the Indemnitor shall
nevertheless indemnify Indemnitee, as a matter of right pursuant to Section 5
hereof, to the extent Indemnitee has been partially successful.
SECTION 7. Determination of Entitlement to Indemnification.
-----------------------------------------------
Upon written request by Indemnitee for indemnification pursuant to Section
3 or 4 hereof, the entitlement of Indemnitee to indemnification pursuant to the
terms of this Agreement shall be determined by the following person or persons
who shall be empowered to make such determination: (a) the Board of Directors
of the Indemnitor by a majority vote of a quorum consisting of Disinterested
Directors (as hereinafter defined); or (b) if such a quorum is not obtainable
or, even if obtainable, if the Board of Directors of the Indemnitor by the
majority vote of Disinterested Directors so directs, by Independent Counsel (as
hereinafter defined) in a written opinion to the Board of Directors, a copy of
which shall be
-3-
delivered to Indemnitee; or (c) by the stockholders of the Indemnitor. Such
Independent Counsel shall be selected by the Board of Directors and approved by
Indemnitee. Upon failure of the Board of Directors to so select such Independent
Counsel or upon failure of Indemnitee to so approve, such Independent Counsel
shall be selected by the Chancellor of the State of Delaware or such other
person as the Chancellor shall designate to make such selection. Such
determination of entitlement to indemnification shall be made no later than 60
days after receipt by the Indemnitor of a written request for indemnification.
Such request shall include documentation or information which is necessary for
such determination and which is reasonably available to Indemnitee. Any costs or
expenses (including attorney's fees) incurred by Indemnitee in connection with
his request for indemnification hereunder shall be borne by the Indemnitor. The
Indemnitor hereby indemnifies and agrees to hold Indemnitee harmless therefrom
irrespective of the outcome of the determination of Indemnitee's entitlement to
indemnification. If the person making such determination shall determine that
Indemnitee is entitled to indemnification as to part (but not all) of the
application for indemnification, such person shall reasonably prorate such
partial indemnification among such claims, issues or matters.
SECTION 8. Presumptions and Effect of Certain Proceedings.
----------------------------------------------
The Secretary of the Indemnitor shall, promptly upon receipt of
Indemnitee's request for indemnification, advise in writing the Board of
Directors of the Indemnitor or such other person or persons empowered to make
the determination as provided in Section 7 that Indemnitee has made such request
for indemnification. Indemnitee shall be presumed to be entitled to
indemnification hereunder and the Indemnitor shall have the burden of proof in
the making of any determination contrary to such presumption. If the person or
persons so empowered to make such determination shall have failed to make the
requested indemnification within 60 days after receipt by the Indemnitor of such
request, the requisite determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be absolutely entitled to such
indemnification, absent actual and material fraud in the request for
indemnification. The termination of any action, suit, investigation or
proceeding described in Section 3 or 4 hereof by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
---------------
itself (a) create a presumption that Indemnitee did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Indemnitor and, with respect to any criminal action or
proceeding, that Indemnitee had reasonable cause to believe that his conduct was
unlawful or (b) otherwise adversely affect the rights of Indemnitee to
indemnification except as may be provided herein.
SECTION 9. Advancement of Expenses and Costs.
---------------------------------
All reasonable expenses and costs incurred by Indemnitee (including
attorneys' fees, retainers and advances of disbursements required of Indemnitee)
shall be paid by the Indemnitor in advance of the final disposition of such
action, suit or proceeding at the request of Indemnitee within twenty days after
the receipt by the Indemnitor of a statement or
-4-
statements from Indemnitee requesting such advance or advances from time to
time. Indemnitee's entitlement to such expenses shall include those incurred in
connection with any proceeding by Indemnitee seeking an adjudication pursuant to
this Agreement. Such statement or statements shall reasonably evidence the
expenses and costs incurred by him in connection therewith and shall include or
be accompanied by an undertaking by or on behalf of Indemnitee to repay such
amount if it is ultimately determined that Indemnitee is not entitled to be
indemnified against such expenses and costs by the Indemnitor as provided by
this Agreement or otherwise.
SECTION 10. Remedies of Indemnitee in Cases of Determination not to
-------------------------------------------------------
Indemnify or to Advance Expenses.
--------------------------------
In the event that a determination is made that Indemnitee is not entitled
to indemnification hereunder or if payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 7 and 8, or
if expenses are not advanced pursuant to Section 9, Indemnitee shall be entitled
to a final adjudication in an appropriate court of the State of New York or any
other court of competent jurisdiction of his entitlement to such indemnification
or advance. The Indemnitor shall not oppose Indemnitee's right to seek any such
adjudication or any other claim. Such judicial proceeding shall be made de novo
-------
and Indemnitee shall not be prejudiced by reason of a determination (if so made)
that he is not entitled to indemnification. If a determination is made or
deemed to have been made pursuant to the terms of Section 7 or Section 8 hereof
that Indemnitee is entitled to indemnification, the Indemnitor shall be bound by
such determination and is precluded from asserting that such determination has
not been made or that the procedure by which such determination was made is not
valid, binding and enforceable. The Indemnitor further agrees to stipulate in
any such court that the Indemnitor is bound by all the provisions of this
Agreement and is precluded from making any assertion to the contrary. If the
court shall determine that Indemnitee is entitled to any indemnification
hereunder, the Indemnitor shall pay all reasonable expenses (including
attorneys' fees) and costs actually incurred by Indemnitee in connection with
such adjudication (including, but not limited to, any appellate proceedings).
SECTION 11. Other Rights to Indemnification.
-------------------------------
The indemnification and advancement of expenses (including attorneys' fees)
and costs provided by this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee may now or in the future be entitled under any
provision of the By-Laws of the Indemnitor, this agreement, provisions of the
Certificate of Incorporation of the Indemnitor, vote of stockholders or
Disinterested Directors of the Indemnitor, provision of law or otherwise.
-5-
SECTION 12. Attorneys' Fees and Other Expenses to Enforce Agreement.
-------------------------------------------------------
In the event that Indemnitee is subject to or intervenes in any proceeding
in which the validity or enforceability of this Agreement is at issue or seeks
an adjudication or award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee, if he prevails in
whole or in part in such action, shall be entitled to recover from the
Indemnitor, and shall be indemnified by the Indemnitor against, any actual
expenses for attorneys' fees and disbursements reasonably incurred by him.
SECTION 13. Duration of Agreement.
---------------------
This Agreement shall continue until and terminate upon the later of (a) 10
years after Indemnitee has ceased to occupy any of the positions or have any of
the relationships described in Section 3 or 4 of this Agreement or (b) the final
termination of all pending or threatened actions, suits, proceedings or
investigations with respect to Indemnitee. This Agreement shall be binding upon
the Indemnitor and its successors and assigns and shall inure to the benefit of
Indemnitee and his spouse, assigns, heirs, devisees, executors, administrators
or other legal representatives.
SECTION 14. 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, all portions of any paragraphs of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
are not themselves 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, all portions of any
paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
SECTION 15. Identical Counterparts.
----------------------
This Agreement may be executed in one or more counterparts, each of which
shall for all purposes be deemed to be an original, but all of which together
shall constitute one and the same Agreement. Only one such counterpart signed
by the party against whom enforceability is sought needs to be produced to
evidence the existence of this Agreement.
SECTION 16. Headings.
--------
-6-
The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.
SECTION 17. Definitions.
-----------
For purposes of this Agreement:
(a) "Disinterested Director" shall mean a director of the Indemnitor who
----------------------
is not or was not a party to the action, suit, investigation or proceeding in
respect of which indemnification is being sought by Indemnitee.
(b) "Independent Counsel" shall mean a law firm or a member of a law firm
-------------------
that neither is presently nor in the past five years has been retained to
represent (i) the Company or Indemnitee in any matter material to either such
party or (ii) any other party to the action, suit, investigation or 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 Company or Indemnitee in
an action to determine Indemnitee's right to indemnification under this
Agreement.
SECTION 18. Modification and Waiver.
-----------------------
No supplement, modification or amendment of this Agreement shall be binding
unless executed in writing by all 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.
SECTION 19. Notice by Indemnitee.
--------------------
Indemnitee agrees promptly to notify the Indemnitor in writing upon being
served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any matter which may be subject to indemnification
covered hereunder, either civil, criminal or investigative.
SECTION 20. 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 if (ii) mailed by certified or registered mail with
postage prepaid on the third business day after the date on which it is so
mailed, to the following addresses:
-7-
(a) if to Indemnitee, to:
[Director]
c/o The Jordan Company
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(b) if to the Company, to:
Xxxxxxx Products, Inc.
c/o The Jordan Company
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
SECTION 21. 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 New York.
-8-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
XXXXXXX PRODUCTS, INC.
By: _____________________________________
Name:
Title:
INDEMNITEE:
_________________________________________
[Director]
-9-
