EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), made and entered into this
25 day of June, 2007, by and between LIMCO-PIEDMONT INC., a company organized
and existing under the laws of Delaware, with its principal place of business at
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx Xxxxxxxx 00000, XXX. (the "Company"), and XXXXX
XXXXXXXX, with a residence in Tulsa, Oklahoma ("Executive").
WITNESSETH
WHEREAS, Executive and the Company desire to enter into a restated
employment agreement; and
WHEREAS, Executive has been acting as President & CEO of Limco Airepair
Inc. ("Limco") since February 5, 1998; and
WHEREAS, on May 10, 2004 Limco and Executive executed an employment
agreement setting forth the terms of Executive's employment as the President &
CEO of Limco (the "Basic Agreement"); and
WHEREAS, in April 2005 Limco and Executive executed supplementary
agreement amending the Basic Agreement and setting forth the terms of
Executive's employment as the President & CEO of Piedmont Aviation Component
Services L.L.C. ("Piedmont") in addition to his position as President & CEO of
Limco (the "Supplementary Agreement"); and
WHEREAS, a new corporate structure has been established and
Limco-Piedmont Inc. has been established as a holding company for Limco and
Piedmont (together the "Subsidiaries"); and
WHEREAS, the Company intends to offer its securities to the public in an
initial public offering (the "IPO");
NOW THEREFORE, in consideration of the mutual covenants set out herein,
the Parties agree as follows:
1. GENERAL
1.1. The Whereas clauses above constitute an integral part of this
Agreement.
1.2. This Agreement, dated June 25, 2007 (the "Effective Date"),
replaces all previous agreements, letters, and arrangements
between the Company, Executive and the Subsidiaries with respect
to the subject matter hereof.
2. TERM
This Agreement shall be for a term beginning on the Effective Date and
ending on December 31, 2008, subject to the earlier termination
provisions contained herein (the "Term"). No later than 90 days prior to
the end of the Term, the parties shall enter into good faith
negotiations for the renewal of this Agreement. If the parties are
unable to reach an agreement, then, upon the expiration of this
Agreement, the Executive's employment shall terminate.
3. THE OFFICE
3.1. In addition to Executive's employment as CEO of the Subsidiaries,
Executive will serve as President & CEO of the Company and shall
report to the Board of Directors of the Company, which will be
represented by the Chairman of the Company.
3.2. Nothing contained herein shall prevent the Board of Directors of
the Company from appointing individuals other than Executive to
serve as president or managing directors of Limco and Piedmont,
provided that such individuals report to Executive as CEO of the
Company.
4. ANNUAL SALARY
Effective January 1, 2007 Executive's annual base salary shall be
$218,380, less applicable taxes and other withholding. It is hereby
agreed that the above annual base salary is inclusive of $18,380, which
represents the Company's prior obligation to pay Executive annually a
2-week severance payment and training stipend.
5. PROFITS PARTICIPATION BONUS
5.1. As of January 1, 2007 Executive shall be entitled to an annual
bonus equal to 3% of the consolidated net profit of the Company,
up to a maximum of $250,000.
5.2. "Consolidated Net Profit" shall mean the consolidated net profits
(before tax and excluding capital gains and after deductions for
accumulated losses, if any) of the Company for the calendar year
for which the bonus is being paid. For any partial year of
employment the bonus will be prorated.
5.3. The Bonus will be paid to Executive within 30 days of the issuance
of audited financial statements by the Company's auditors for the
calendar year for which the bonus is being paid.
6. IPO BONUS AND THE GRANT OF OPTIONS
6.1. Upon the closing and consummation of the IPO, provided the
IPO and consummation occurs before December 31, 2007, Executive
will be entitled to an IPO Bonus of $250,000 (the "IPO Bonus
Amount"), provided that the
gross proceeds raised by Company IPO (the "Company Proceeds") are
$35 million, plus or minus 20%. If the Company Proceeds are more
than $42 million or less than $28 million, the IPO Bonus Amount
will be increased or decreased, as the case may be, according to
the proportion between the actual Company Proceeds and $35
million. Proceeds to the selling shareholder for its sale of the
Company shares in the IPO will not be considered as Company
Proceeds.
The IPO Bonus amount will be paid within 30 days following the IPO
Closing Date provided Executive was not terminated for cause prior
to the date of payment.
6.2. Executive shall be issued options under the Company incentive
option plan (the "Options Plan") to purchase 66,000 shares of the
Company's common stock under the same terms and exercise price as
shall be determined by the Board for all the recipients of options
granted under the Option Plan prior to the IPO, except that the
options shall vest over a two year period beginning upon issuance,
with 25% of the options vesting semi-annually.
7. PHANTOM OPTIONS ON TAT TECHNOLOGIES LTD. SHARES
7.1. The Company hereby assumes and accepts all of Limco's liabilities
and obligations to Executive concerning 5,000 outstanding
non-transferable Phantom Options based on the Price at the NASDAQ
of the shares of TAT Technologies Ltd. ("TAT"), granted to
Executive by Limco according to Section 5 of the Supplementary
Agreement ("the Phantom Options").
7.2. The Phantom Options may be exercised by Executive during the
period commencing on the date hereof and ending on June 30, 2010
(inclusive) (the "Exercise Period") by submitting to the Company,
a written notice (the "Exercised Notice") stating the Executive
wishes to exercise the Phantom Options. The date the Company
receives any such Exercise Notice shall be the "Exercise Date."
7.3. No later than 15 days following the Exercise Date, the Company
will pay Executive an amount equal to the balance between the
average closing price of TAT's shares at the NASDAQ during the 60
trading days ending on the Exercise Date (inclusive) (the "Average
Share Price") and US$ 6.75 (the "Basic Exercise Price"),
multiplied by the number of Phantom Options exercised according to
that Exercise Notice (the "Gain").
The Basic Exercise Price will be reduced by any dividend payment
per share by TAT to its Shareholders after the grant of the
Phantom Options by Limco. The reduced Basic Exercise Price
following dividends payments made by TAT until the date hereof is
US$ 6.37.
8. VEHICLE
The Company shall provide Executive with a vehicle suitable for his
position which shall be approved by the Board of Directors. The Company
shall pay all costs concerning its maintenance and operation, except for
traffic fines and other such obligatory payments.
9. EXPENSES REIMBURSEMENT
The Company shall reimburse Executive for all reasonable out-of-pocket
expenses incurred by Executive in connection with the performance of his
duties hereunder, including expenses incurred for travel inside and
outside the USA, provided that the Executive properly accounts for such
expenses in accordance with the Company's policies and budgets.
10. HOUSE EXPENSES
The Company shall pay all reasonable expenses incurred by Executive in
connection with Executive's house in Tulsa, including, rent,
electricity, gas, water, cable television and telephone.
11. FLIGHT TICKETS
The Company shall pay for up to four round-trip tickets annually between
Tulsa and Israel for Executive's wife.
12. USA VISAS AND PERMITS
The Company shall bear all costs with respect to Visas and permits
entering and staying in United States for Executive.
13. ADDITIONAL BENEFITS
13.1. Executive shall be entitled to 23 vacation days per year to be
accrued on a monthly basis in accordance with the Company's
vacation policy. Executive shall be entitled to accrue no more
than 552 hours at any given time. The Parties hereby confirm
that as of December 31, 2006 the balance of Executive vacation
rights is 501 hours. At the end of every calendar year Executive
will inform the Chairman of the Board in writing as to the
balance of his vacation rights.
13.2. Executive shall be entitled to receive Company benefits as paid
to other managers of the Company.
13.3. Executive shall be entitled to a clothing allowance of up to
$1,000 per year.
14. TERMINATION
The Company may terminate this Agreement for "Cause" at any time, upon
written notice to the Executive setting forth in reasonable detail the
nature of such Cause. For purposes of this Agreement, Cause is defined
as (i) the Executive's willful and material breach of the terms of this
Agreement or of any other agreement with the Company; (ii) the
Executive's commission of any felony or any crime involving moral
turpitude; (iii) gross negligence or willful misconduct by the Executive
in connection with his position hereunder; (iv) the Executive's willful
refusal to perform his duties hereunder; (v) persistent poor performance
as assessed in good faith by the Company or (vi) the Executive's failure
to follow the written policies or directives of the Company. Upon the
termination for Cause of Executive's employment, the Company shall have
no further obligation or liability to the Executive other than for
salary earned under this Agreement prior to the date of termination, and
any accrued but unused vacation.
15. ADAPTATION BONUS
At the completion of his employment by the Company, Executive will be
paid an adaptation bonus of six (6) months' base salary and
reimbursement for moving expenses to Israel up to $4000 (against
receipts).
16. TAXES
Any taxes due as a result of the benefits provided to Executive pursuant
to this Agreement shall be paid by Executive. Expenses reimbursed
pursuant to Sections 8, 10, 11, 12 and 13 above shall be net of any
taxes due.
16. INDEMNIFICATION
The parties shall enter into and indemnification agreement substantially
in the form attached hereto as Exhibit A.
17. CONFIDENTIALITY; NON-COMPETE; NON-SOLICIT
17.1 During Executive's employment with the Company and afterwards,
Executive shall keep and treat as confidential information this
Agreement and all non-public information obtained by Executive
during his employment with the Company and its Subsidiaries and
shall not disclose or use any information of the Company or its
Subsidiaries that is not available to the public.
17.2 During the Executive's employment and for a period of twelve
months after termination for any reason, Executive shall not,
within any jurisdiction in which the Company or its Subsidiaries
are transacting business or has authorized others to do
business, directly or indirectly own, manage,
operate, control, be employed by, provide consulting services to
or for, or participate in the ownership, management, operation
or control of any business of the type and character engaged in
by the Company or its subsidiaries or competitive with the
Company or its Subsidiaries, including but not limited to the
manufacturing, sale and/or overhaul of aircraft ducts and heat
exchangers and their components, and other business engaged in
by the Company or its Subsidiaries during the Executive's
employment with the Company.
17.3 During the Executive's employment and thereafter, Executive
shall not directly or indirectly hire, employ or offer any
alternative employment opportunity to any employee of the
Company or its Subsidiaries.
18. NOTICES.
Any notice under the Agreement shall be in writing and shall be
effective when actually delivered in person, or, if mailed, three days
after mailing to the party at the address stated in the Agreement or
such other address as either party may designate by written notice.
19. ENTIRE AND BINDING AGREEMENT.
The Agreement contains the full understanding and agreement between and
among the Parties regarding Executive's employment and the termination
and supersedes any prior understandings and agreements. The Agreement
and any subsequent amendments or attachments formally executed shall be
binding upon the heirs, executors, administrators, successors and
assignees of the parties hereto.
20. GOOD FAITH AND COOPERATION.
The parties hereto covenant, warrant and represent to each other good
faith, complete cooperation and honesty in fact in the performance of
all obligations pursuant to the Agreement. All promises and covenants
are mutual and dependent.
21. SAVING CLAUSE.
If any provision of the Agreement, or the application of such provision
shall be held invalid, the remainder of the Agreement or the application
of such provision to persons or circumstances other than those as to
which it is held invalid shall not be affected thereby.
22. CHOICE OF LAW.
The validity, interpretation and performance of this Agreement shall be
governed by, and construed in accordance with, the internal law of
Oklahoma, without giving effect to conflict of law principles.
23. ASSIGNMENT.
The Executive acknowledges and agrees that the rights and obligations of
the Company under this Agreement may be assigned by the Company to any
successors in interest. The Executive further acknowledges and agrees
that this Agreement is personal to the Executive and that the Executive
may not assign any rights or obligations hereunder.
24. AMENDMENTS.
Any attempted modification of this Agreement will not be effective
unless signed by an officer of the Company and the Executive.
IN WITNESS WHEREOF, the Parties have agreed and are duly authorized to
execute this Agreement the day and year first herein above written.
For and on behalf of
/s/ Dov Zeelim /s/ Xxxxx Xxxxxxxx
------------------ -------------------
Piedmont - Limco Inc. Xxxxx Xxxxxxxx
By: Dov Zeelim
Title: Chairman
Date: 6/25/07
EXHIBIT A
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") is made and entered
into as of the 25 day of June 2007 by and between Limco-Piedmont Inc., a
Delaware corporation (the "Corporation"), and Xxxxx Xxxxxxxx ("Indemnitee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Indemnitee is currently serving or is about to begin serving as
a director and/or officer of the Corporation and/or in another Corporate Status,
and Indemnitee is willing, subject to, among other things, the Corporation's
execution of this Agreement, to continue in or assume such capacity or
capacities; and
WHEREAS, the Bylaws of the Corporation provide that the Corporation
shall indemnify directors and officers of the Corporation in the manner set
forth therein; and
WHEREAS, the Corporation and Indemnitee desire to enter into this
Agreement to induce Indemnitee to provide services as contemplated hereby and
the Corporation has deemed it to be in its best interest to enter into this
Agreement with Indemnitee.
NOW, THEREFORE, in consideration of Indemnitee's agreement to provide
services to the Corporation and/or certain of its affiliates as contemplated by
this Agreement, the mutual agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows.
1. CERTAIN DEFINITIONS
As used herein, the following words and terms shall have the following
respective meanings (whether singular or plural):
"CHANGE OF CONTROL" means a change in control of the Corporation after
the date Indemnitee acquired his Corporate Status, which shall be deemed to have
occurred in any one of the following circumstances occurring after such date:
(i) there shall have occurred an event required to be reported with respect to
the Corporation in response to Item 6(e) 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 "Exchange Act"),
whether or not the Corporation is then subject to such reporting requirement;
(ii) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) shall have become the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 40% or more of the combined voting power of the
Corporation's then outstanding voting
securities without prior approval of at least two-thirds of the members of the
Board of Directors in office immediately prior to such person attaining such
percentage interest; (iii) 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 of Directors in office immediately
prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter; or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors (including, for this purpose, any new director whose election or
nomination for election by the Corporation's shareholders 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 of Directors.
"CORPORATE STATUS" describes the status of Indemnitee as a director,
officer, employee, agent or fiduciary of the Corporation or of any other
corporation, partnership, limited liability company, association, joint venture,
trust, employee benefit plan or other enterprise that Indemnitee is or was
serving at the express written request of the Corporation.
"COURT" means the District Court of Tulsa County of the State of
Oklahoma or any other court of competent jurisdiction.
"DGCL" means the Delaware General Corporation Law, as amended from time
to time.
"EXPENSES" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in a
Proceeding.
"INDEPENDENT COUNSEL" means a law firm, or a member of a law firm, that
is experienced in matters of corporation law and neither presently is, nor in
the five years previous to his selection or appointment has been, 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.
"MATTER" is a claim, a material issue or a substantial request for
relief.
"PROCEEDING" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except one
initiated by Indemnitee pursuant to SECTION 6.01 of this Agreement to enforce
his rights under this Agreement.
2. SERVICES BY INDEMNITEE
2.01 SERVICES BY INDEMNITEE. Indemnitee agrees to serve or continue to serve
in his current capacity or capacities as a director, officer, employee,
agent or fiduciary of the Corporation. Indemnitee also agrees to serve,
as the Corporation may request from time to time, as a director,
officer, employee, agent or fiduciary of any other corporation,
partnership, limited liability company, association, joint venture,
trust or other enterprise in which the Corporation has an interest.
Indemnitee and the Corporation each acknowledge that they have entered
into this Agreement as a means of inducing Indemnitee to serve the
Corporation in such capacities.
2.02 TERMINATION OF SERVICES. Indemnitee may at any time and for any reason
resign from such position or positions (subject to any other contractual
obligation or any obligation imposed by operation of law). The
Corporation shall have no obligation under this Agreement to continue
Indemnitee's service to the Corporation in any such position for any
period of time and shall not be precluded by the provisions of this
Agreement from removing or terminating Indemnitee from any such position
at any time.
3. INDEMNIFICATION
3.01 GENERAL. The Corporation shall, to the fullest extent permitted by, and
subject to the limitations specified by, applicable law in effect on the
date hereof, and to such greater extent as applicable law may thereafter
permit, indemnify and hold Indemnitee harmless from and against any and
all losses, liabilities, claims, damages and, subject to SECTION 3.02,
Expenses (as this and all other capitalized words are defined in ARTICLE
1. of this Agreement), whatsoever, other than in an action by or in the
right of the Corporation, arising out of any event or occurrence related
to the fact that Indemnitee is or was a director or officer of the
Corporation or is or was serving at the express written request of the
Corporation in another Corporate Status.
3.02 EXPENSES. If Indemnitee is, by reason of his Corporate Status, a party
to and is successful, on the merits or otherwise, in any Proceeding, he
shall be indemnified against all 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 any Matter in such Proceeding, the
Corporation shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf relating to such Matter. The
termination of any Matter in such a Proceeding by dismissal, with or
without prejudice, shall be deemed to be a successful result as to such
Matter. To the extent that the Indemnitee is, by reason of his Corporate
Status, a witness in any Proceeding, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in
connection therewith.
4. ADVANCEMENT OF EXPENSES
4.01 ADVANCES. In the event of any threatened or pending action, suit or
proceeding in which Indemnitee is a party or is involved and that may
give rise to a right of indemnification under this Agreement, following
written request to the Corporation by Indemnitee, the Corporation shall
promptly pay to Indemnitee amounts to cover expenses reasonably incurred
by Indemnitee in such proceeding in advance of its final disposition
upon the receipt by the Corporation of (i) a written undertaking
executed by or on behalf of Indemnitee providing that Indemnitee will
repay the advance if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified by the Corporation under applicable
law or as provided in this Agreement and (ii) satisfactory evidence as
to the amount of such expenses.
4.02 REPAYMENT OF ADVANCES OR OTHER EXPENSES. Indemnitee agrees that
Indemnitee shall reimburse the Corporation for all expenses paid by the
Corporation in defending any civil, criminal, administrative or
investigative action, suit or proceeding against Indemnitee in the event
and only to the extent that it shall be determined pursuant to the
provisions of this Agreement or by final judgment or other final
adjudication under the provisions of any applicable law that Indemnitee
is not entitled to be indemnified by the Corporation for such expenses.
5. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
5.01 REQUEST FOR INDEMNIFICATION. To obtain indemnification, Indemnitee shall
submit to the Secretary of the Corporation a written claim or request.
Such written claim or request shall contain sufficient information to
reasonably inform the Corporation about the nature and extent of the
indemnification or advance sought by Indemnitee. At the request of the
Corporation, Indemnitee shall furnish such further documentation and
information as are reasonably available to Indemnitee that will
establish that Indemnitee is entitled to indemnification hereunder. The
Secretary of the Corporation shall promptly advise the Board of
Directors of such request.
5.02 DETERMINATION OF ENTITLEMENT; NO CHANGE OF CONTROL. If there has been no
Change of Control at the time the request for indemnification is
submitted, Indemnitee's entitlement to indemnification shall be
determined in accordance with Section 145(d) of the DGCL. If entitlement
to indemnification is to be determined by Independent Counsel, the
Corporation shall furnish notice to Indemnitee within 10 days after
receipt of the request for indemnification, specifying the identity and
address of Independent Counsel. The Indemnitee may, within 14 days after
receipt of such written notice of selection, deliver to the Corporation
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
requirements of Independent Counsel and the objection shall set forth
with particularity the factual basis for such assertion. If there is an
objection to the selection of Independent Counsel, either the
Corporation or Indemnitee may petition the Court for a determination
that the objection is without a reasonable basis and/or for the
appointment of Independent Counsel selected by the Court.
5.03 DETERMINATION OF ENTITLEMENT; CHANGE OF CONTROL. If there has been a
Change of Control at the time the request for indemnification is
submitted, Indemnitee's entitlement to indemnification shall be
determined in a written opinion by Independent Counsel selected by
Indemnitee. Indemnitee shall give the Corporation, within 10 days after
receipt of the request for indemnification, written notice advising of
the identity and address of the Independent Counsel so selected. The
Corporation may, within 14 days after receipt of such written notice of
selection, deliver to the Indemnitee a written objection to such
selection. Indemnitee may, within five days after the receipt of such
objection from the Corporation, submit the name of another Independent
Counsel and the Corporation may, within seven days after receipt of such
written notice of selection, deliver to the Indemnitee a written
objection to such selection. Any objections referred to in this SECTION
5.03 may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of Independent Counsel and such
objection shall set forth with particularity the factual basis for such
assertion. Indemnitee may petition the Court for a determination that
the Corporation's objection to the first and/or second selection of
Independent Counsel is without a reasonable basis and/or for the
appointment as Independent Counsel of a person selected by the Court.
5.04 PROCEDURES OF INDEPENDENT COUNSEL. If a Change of Control shall have
occurred before the request for indemnification is sent by Indemnitee,
Indemnitee shall be presumed (except as otherwise expressly provided in
this Agreement) to be entitled to indemnification upon submission of a
request for indemnification in accordance with SECTION 5.01 of this
Agreement, and thereafter the Corporation shall have the burden of proof
to overcome the presumption in reaching a determination contrary to the
presumption. The presumption shall be used by Independent Counsel as a
basis for a determination of entitlement to indemnification unless the
Corporation provides information sufficient to overcome such presumption
by clear and convincing evidence or the investigation, review and
analysis of Independent Counsel convinces him by clear and convincing
evidence that the presumption should not apply.
Except in the event that the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or
persons empowered under SECTION 5.02 or 5.03 of this Agreement to
determine entitlement to indemnification shall not have made and
furnished to Indemnitee in writing a determination within 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 unless Indemnitee knowingly misrepresented a material
fact in connection with the request for indemnification or such
indemnification is prohibited by applicable law. The termination of any
Proceeding or of any Matter therein, by judgment, order, settlement or
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall
not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification 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 was unlawful. A person who acted in good faith and in a manner
he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan of the Corporation shall be
deemed to have acted in a manner not opposed to the best interests of
the Corporation.
For purposes of any determination hereunder, a person shall be deemed to
have acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation, or, with
respect to any criminal action or Proceeding, to have had no reasonable
cause to believe his conduct was unlawful, if his action is based on the
records or books of account of the Corporation or another enterprise or
on information supplied to him by the officers of the Corporation or
another enterprise in the course of their duties or on the advice of
legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the Corporation or
another enterprise by an independent certified public accountant or by
an appraiser or other expert selected with reasonable care by the
Corporation or another enterprise. The term "another enterprise" as used
in this Section shall mean any other corporation or any partnership,
limited liability company, association, joint venture, trust, employee
benefit plan or other enterprise of which such person is or was serving
at the express written request of the Corporation as a director,
officer, employee or agent. The provisions of this paragraph shall not
be deemed to be exclusive or to limit in any way the circumstances in
which an Indemnitee may be deemed to have met the applicable standards
of conduct for determining entitlement to rights under this Agreement.
5.05 INDEPENDENT COUNSEL EXPENSES. If it shall be determined by Independent
Counsel that Indemnitee is entitled to indemnification under this
Agreement, the Corporation shall pay any and all reasonable fees and
expenses of Independent Counsel incurred acting pursuant to this ARTICLE
5. and in any proceeding to which it is a party or witness in respect of
its investigation and written report and shall pay all reasonable fees
and expenses incident to the procedures in which such Independent
Counsel was selected or appointed. No Independent Counsel may serve if a
timely objection has been made to his selection until a Court has
determined that such objection is without a reasonable basis.
6. CERTAIN REMEDIES OF INDEMNITEE
6.01 ADJUDICATION. In the event that (i) a determination is made pursuant to
SECTION 5.02 or 5.03 hereof that Indemnitee is not entitled to
indemnification under this Agreement; (ii) advancement of Expenses is
not timely made pursuant to SECTION 4.01 of this Agreement; (iii)
Independent Counsel has not made and delivered a written opinion
determining the request for indemnification (a) within 90 days after
being appointed by the Court, or (b) within 90 days after objections to
his selection have been overruled by the Court or (c) within 90 days
after the time for the Corporation or Indemnitee to object to his
selection; or (iv) payment of indemnification is not made within 20 days
after a determination of entitlement to indemnification has been made or
deemed to have been made pursuant to SECTION 5.02, 5.03 or 5.04 of this
Agreement, Indemnitee shall be entitled to an adjudication in the Court,
or in any other court of competent jurisdiction, of his entitlement to
such indemnification or advancement of Expenses. In the event that a
determination shall have been made that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced
pursuant to this SECTION 6.01 shall be conducted in all respects as a DE
NOVO trial on the merits and Indemnitee shall not be prejudiced by
reason of that adverse determination. If a Change of Control shall have
occurred, in any judicial proceeding commenced pursuant to this SECTION
6.01, the Corporation shall have the burden of proving that Indemnitee
is not entitled to indemnification or advancement of Expenses, as the
case may be. If a determination shall have been made that Indemnitee is
entitled to indemnification, the Corporation shall be bound by such
determination in any judicial proceeding commenced pursuant to this
SECTION 6.01, or otherwise, unless Indemnitee knowingly misrepresented a
material fact in connection with the request for indemnification, or
such indemnification is prohibited by law.
The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to this SECTION 6.01 that the procedures
and presumptions of this Agreement are not valid, binding and
enforceable, and shall stipulate in any such proceeding that the
Corporation is bound by all provisions of this Agreement. In the event
that Indemnitee, pursuant to this SECTION 6.01, seeks a judicial
adjudication 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 actually and reasonably incurred by him in such
judicial adjudication, but only if he prevails therein. If it shall be
determined in such judicial adjudication that Indemnitee is entitled to
receive part but not all of the indemnification or advancement of
Expenses sought, the Expenses actually and reasonably incurred by
Indemnitee in connection with such judicial adjudication or arbitration
shall be appropriately prorated.
7. PARTICIPATION BY THE CORPORATION
7.01 PARTICIPATION BY THE CORPORATION. With respect to any such claim,
action, suit, proceeding or investigation as to which Indemnitee
notifies the Corporation of the commencement thereof: (a) the
Corporation will be entitled to participate therein at its own expense;
(b) except as otherwise provided below, to the extent that it may wish,
the Corporation (jointly with any other indemnifying party similarly
notified) will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Indemnitee. After receipt of notice from the
Corporation to Indemnitee of the Corporation's election so to assume the
defense thereof, the Corporation will not be liable to Indemnitee under
this Agreement for any legal or other 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 his own counsel in such action, suit,
proceeding or investigation 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 there
is a conflict of interest between the Corporation and Indemnitee in the
conduct of the defense of such action or (iii) the Corporation shall not
in fact have employed counsel to assume the defense of such action, in
each of which cases the fees and expenses of counsel employed by
Indemnitee shall be subject to indemnification pursuant to the terms of
this Agreement (the Corporation shall not be entitled to assume the
defense of any action, suit, proceeding or investigation brought in the
name of or on behalf of the Corporation or as to which Indemnitee shall
have made the conclusion provided for in (ii) above); and (c) the
Corporation shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any action or claim
effected without its written consent, which consent shall not be
unreasonably withheld. The Corporation shall not settle any action or
claim in any manner that would impose any limitation or unindemnified
penalty on Indemnitee without Indemnitee's written consent, which
consent shall not be unreasonably withheld.
8. MISCELLANEOUS
8.01 NONEXCLUSIVITY OF RIGHTS; TERM. The rights of indemnification and
advancement of Expenses as provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may at any time
be entitled to under applicable law, the Corporation's Certificate of
Incorporation, the Corporation's Bylaws, any agreement, a vote of
shareholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Agreement or any provision hereof shall be
effective as to Indemnitee for acts, events and circumstances that
occurred, in whole or in part, before such amendment, alteration or
repeal.
This Agreement shall continue until and terminate upon the later of: (a)
10 years
after the date that Indemnitee has ceased to serve as a director,
officer, employee, agent or fiduciary of the Corporation or of any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which Indemnitee served at the express written request
of the Corporation or (b) the final termination of all pending
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 6 of this
Agreement relating thereto. In addition, no legal action shall be
brought and no cause of action shall be asserted by or in the right of
the Corporation against Indemnitee, Indemnitee's estate, spouse, heirs,
executors or personal or legal representatives after the expiration of 5
years from the date of accrual of such cause of action, and any claim or
cause of action of the Corporation shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within
such five 5 year period; provided, however, that if any shorter period
of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
8.02 INSURANCE AND SUBROGATION. The Corporation shall not be liable under
this Agreement to make any payment of amounts otherwise indemnifiable
hereunder if, but only to the extent that, Indemnitee has otherwise
actually received such payment under any insurance policy, contract,
agreement or otherwise. In the event of any payment hereunder, the
Corporation shall be subrogated to the extent of such payment to all the
rights of recovery of Indemnitee, who shall execute all papers required
and take all action reasonably requested by the Corporation to secure
such rights, including execution of such documents as are necessary to
enable the Corporation to bring suit to enforce such rights.
8.03 ACKNOWLEDGMENT OF CERTAIN MATTERS. Both the Corporation and Indemnitee
acknowledge that in certain instances, applicable law or public policy
may prohibit indemnification of Indemnitee by the Corporation under this
Agreement or otherwise. Indemnitee understands and acknowledges that the
Corporation has undertaken or may be required in the future to
undertake, by the Securities and Exchange Commission, to submit the
question of indemnification to a court in certain circumstances for a
determination of the Corporation's right under public policy to
indemnify Indemnitee.
8.04 AMENDMENT. This Agreement may not be modified or amended except by a
written instrument executed by or on behalf of each of the parties
hereto.
8.05 WAIVERS. The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively
or prospectively) by the party entitled to enforce such term only by a
writing signed by the party against which such waiver is to be asserted.
Unless otherwise expressly provided herein, no delay on the part of any
party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any
party hereto of any right, power or privilege hereunder operate as a
waiver of any other right, power or privilege hereunder nor shall any
single or
partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege hereunder.
8.06 ENTIRE AGREEMENT. This Agreement and the documents referred to herein
constitute the entire agreement between the parties hereto with respect
to the matters covered hereby, and any other prior or contemporaneous
oral or written understandings or agreements with respect to the matters
covered hereby are superseded by this Agreement.
8.07 SEVERABILITY. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby; and, to the
fullest extent possible, the provisions of this Agreement shall be
construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable.
8.08 CERTAIN ACTIONS FOR WHICH INDEMNIFICATION IS NOT PROVIDED.
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 Matter therein, brought
or made by Indemnitee against the Corporation or brought or made by the
Corporation against Indemnitee.
8.09 NOTICES. Promptly after receipt by Indemnitee of notice of the
commencement of any action, suit or proceeding, Indemnitee shall, if he
anticipates or contemplates making a claim for expenses or an advance
pursuant to the terms of this Agreement, notify the Corporation of the
commencement of such action, suit or proceeding; provided, however, that
any delay in so notifying the Corporation shall not constitute a waiver
or release by Indemnitee of rights hereunder and that any omission by
Indemnitee to so notify the Corporation shall not relieve the
Corporation from any liability that it may have to Indemnitee otherwise
than under this Agreement. Any communication required or permitted to
the Corporation shall be addressed to the Secretary of the Corporation
and any such communication to Indemnitee shall be addressed to the
Indemnitee's address as shown on the Corporation's records unless the
Indemnitee specifies otherwise and shall be personally delivered or
delivered by overnight mail delivery. Any such notice shall be effective
upon receipt.
8.10 GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware without regard to any
principles of conflict of laws that, if applied, might permit or require
the application of the laws of a different jurisdiction.
8.11 HEADINGS. The Article and Section headings in this Agreement are for
convenience of reference only, and shall not be deemed to alter or
affect the
meaning or interpretation of any provisions hereof.
8.12 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument.
8.13 USE OF CERTAIN TERMS. As used in this Agreement, the words "herein,"
"hereof," and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular paragraph,
subparagraph, section, subsection, or other subdivision. Whenever the
context may require, any pronoun used in this Agreement shall include
the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice
versa.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
to be effective as of the date first above written.
LIMCO-PIEDMONT INC.
By: /s/ Dov Zeelim
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Name: Dov Zeelim
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Title: Chairman
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XXXXX XXXXXXXX
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
