Exhibit 10.11
INDEMNITY AGREEMENT
THIS AGREEMENT is made and entered into as of ________________, 1999,
by and between AVIATION HOLDINGS GROUP, INC., a Delaware corporation (the
"Company"), and _______________________ (the "Indemnitee").
PRELIMINARY STATEMENTS
WHEREAS, the Company desires to retain the services of the Indemnitee
as a director, officer, employee and/or agent of the Company;
WHEREAS, Section 607.0850 of the Florida Business Corporation Act (the
"Act") provides a non-exclusive statutory basis for the indemnification of
directors, officers, employees and agents of a Florida corporation and
authorizes agreements between the Company and its directors, officers, employees
and agents with respect to indemnification of such individuals.
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons so that they will
serve or continue to serve the Company free from undue concern that they will
not be so indemnified, and the Indemnitee is wiling to serve, continue to serve
and to take on additional service for or on behalf of the Company on the
condition that he be so indemnified; and
WHEREAS, in order to induce the Indemnitee to serve or to continue to
serve as a director, officer, employee and/or agent of the Company and/or a
subsidiary of the Company, the Company has determined and agreed to enter into
this agreement with the Indemnitee, and the Company and the Indemnitee agree as
follows:
1. Indemnification of Indemnitee. The Company hereby agrees to hold
harmless and indemnify the Indemnitee to the fullest extent authorized or
permitted by the provisions of the Florida Statute, or by any amendment thereof
or other statutory provision authorizing or permitting such indemnification
adopted after the date hereof that has the effect of broadening (but not
narrowing) the scope of indemnification provided under the Florida Statute as it
exists as of the date hereof.
2. Additional Indemnification. In addition to any other indemnification
to which the Indemnitee may be entitled pursuant to the Florida Statute, the
Company's Articles of Incorporation (the "Articles") or Bylaws (the "Bylaws"),
or otherwise, and subject only to the limitation set forth in Section 3 hereof,
the Company hereby further agrees to hold harmless and
indemnify the Indemnitee against any and all costs and expenses (including
trial, appellate and other attorneys' fees), judgments, fines, penalties and
amounts paid in settlement, actually and reasonably incurred by the Indemnitee
in connection with any threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of the
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Company or a corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise or by or in the right of any other person) to which the
Indemnitee is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that the Indemnitee is, was or at any time becomes
a director, officer, employee or agent of the Company, or is or was serving or
at any time serves at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. Notwithstanding any other provision
of this Agreement, the Company shall pay and reimburse all expenses incurred by
Indemnitee in connection with his appearance as a witness or other participation
in a proceeding at a time when he is not a named defendant or respondent in the
proceeding.
3. Limitations on Additional Indemnification. No indemnification
pursuant to Section 2 hereof shall be paid by the Company if a judgment (after
exhaustion of all appeals) or other final adjudication determines that the
Indemnitee's actions, or omissions to act, were material to the cause of action
so adjudicated and constitute:
a. a violation of criminal law, unless the Indemnitee had
reasonable cause to believe his conduct was lawful; or had no reasonable cause
to believe his conduct was unlawful;
b. a transaction from which the Indemnitee received an
improper personal benefit within the meaning of Section 607.0850(7)(b) of the
Florida Statute;
c. in the case of a director, a circumstance under which the
liability provisions of Section 607.0834 of the Florida Business Corporation Act
are applicable; or
d. willful misconduct or a conscious disregard for the best
interests of the Company in a proceeding by or in the right of the Company to
procure a judgment in its favor or in a proceeding by or in the right of a
shareholder of the Company.
4. Disbursement/Repayment of Expenses. In addition to the prompt
payment of any indemnification to which the Indemnitee may be entitled, upon the
demand of the Indemnitee, the Company shall promptly (and in any event within
five (5) business days after written demand therefor) advance to or reimburse
the Indemnitee for all reasonable expenses (including, without limitation,
trial, appellate and other attorneys' fees, court costs, judgments, fines,
penalties, amounts paid in settlement and other payments) that the Indemnitee
may incur in responding to, investigating, defending, settling or appealing any
claim, action, suit or proceeding for which it reasonably appears that the
indemnitee may be entitled to indemnification from the Company, either pursuant
to this Agreement, the Florida Statute, the Articles, the Bylaws or otherwise.
The Indemnitee agrees to reimburse the Company for all such expenses in the
event, and only to the extent, that it shall be ultimately determined that the
Indemnitee is not entitled to be indemnified by the Company for such expenses
under the provisions of Section 3 of this Agreement. Such undertaking to
reimburse the Company for amounts advanced if it is ultimately determined that
the Indemnitee is not entitled to be indemnified by the Company is an unlimited
general, unsecured and interest free obligation of the Indemnitee.
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5. Indemnification Procedures.
a. Payment/Determination of Indemnification. Upon any request from
the Indemnitee for indemnification from the Company, whether pursuant to this
Agreement, the Florida Statute, the Articles, the Bylaws or otherwise, the
Company shall promptly pay the full amount of such requested indemnification. If
the Company's Board of Directors (the "Board") reasonably believes that all or
any portion of such indemnification pursuant to this Agreement is prohibited by
Section 3 hereof, the Company shall in any event promptly pay the amount of such
indemnification if any, that may reasonably then be paid and shall promptly make
or cause to be made a determination (the "Determination") of whether the payment
of the balance is limited by Section 3 hereof. Such Determination shall be made
in the following order or preference:
(i) by the Board of Directors by majority vote or consent of a
quorum consisting of directors who are not, at the time of the Determination,
named parties to such action, suit or proceeding ("Disinterested Directors");
or
(ii) if such a quorum of Disinterested Directors cannot be
obtained by majority vote or consent of a committee duly designated by the Board
(in which designation all directors, whether or not Disinterested Directors, may
participate) consisting solely of two or more Disinterested Directors; or
(iii) if such a committee cannot be established, by the opinion
of independent outside legal counsel employed by the Company; or
(iv) if such legal opinion cannot be obtained, by a majority vote
or consent of a quorum of shareholders who are not parties to such action, suit
or proceedings or, if not such quorum is obtainable, by a majority vote of such
shareholders.
b. Presumptions and Effect of Certain Proceedings. In making a
Determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making the Determination shall presume that
Indemnitee is entitled to indemnification under this Agreement and the Company
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. The termination of any claim, action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, be determinative of or create a
presumption that the Indemnitee is not entitled to indemnification or
reimbursement of expenses hereunder or otherwise.
c. Reliance as Safe Harbor. For purposes of any Determination
hereunder, the Indemnitee 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 Company; or with respect to any criminal action or proceeding, to have had
reasonable cause to believe his conduct was lawful, or no reasonable cause to
believe his conduct was unlawful; if his action is based on information,
opinions, reports, or statements, including financial statements and other
financial data, prepared or presented by one or more officers or employees of
the Company whom the
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Director reasonably believes to be reliable and competent in such matters
presented; legal counsel, public accountants, or other persons as to matters the
Director reasonably believes are within the persons' professional or expert
competence; or a committee of the Board of Directors of which he is not a member
if the Director reasonably believes the committee merits confidence. The term
"another enterprise" as used in this Section 5(c) shall mean any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise of which the Indemnitee is or was serving at the request of the
Company as a director, officer, partner, trustee, employee or agent. The
provisions of this Section 5(c) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed to have
met the applicable standard of conduct set forth herein.
d. Success on Merits or Otherwise. Notwithstanding any other
provision for this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding described herein, or in defense of any claim, issue or matter
therein, he shall be indemnified against all costs and expenses (including
trial, appellate and other attorneys' fees) actually and reasonably incurred by
him in connection with the investigation, defense, settlement or appeal thereof.
For purposes of this Section 5(d), the term "successful on the merits or
otherwise" shall include, but not be limited to, (i) any termination,
withdrawal, or dismissal (with or without prejudice) of any claim, action, suit
or proceeding against the Indemnitee without any express finding of liability or
guilt against him, (ii) the expiration of 90 days after the making of any claim
or threat of an action, suit or proceeding without the institution of the same
and without any promise of payment made to induce a settlement, or (iii) the
settlement of any action, suit or proceeding pursuant to which the Indemnitee
pays less than $15,000 in settlement.
e. Partial Indemnification or Reimbursement. If the Indemnitee
is entitled under any provision of this Agreement to indemnification and/or
reimbursement by the Company for some or a portion of the costs and expenses
(including trial, appellate and other attorneys' fees) judgments, fines,
penalties or amounts paid in settlement by the Indemnitee in connection with the
investigation, defense, settlement or appeal of any action specified herein, but
not, however, for the total amount thereof, the Company shall nevertheless
indemnify and/or reimburse the Indemnitee for the portion thereof to which the
Indemnitee is entitled. The party or parties making the Determination shall
determine the portion (if less than all) of such claims, damages, expenses
(including trial, appellate and other attorneys' fees), judgments, fines or
amounts paid in settlement for which the Indemnitee is entitled to
indemnification and/or reimbursement under this Agreement.
f. Costs. All costs of making any Determination required by
this Section 5 shall be borne solely by the Company, including, but not limited
to, the costs of legal counsel, proxy solicitations and judicial determinations.
The Company shall also be solely responsible for paying (i) all reasonable
expenses incurred by the Indemnitee to enforce this Agreement including trial,
appellate and other attorneys' fees and costs; and (ii) all costs of defending
any suits or proceedings challenging payments to the Indemnitee under this
Agreement including trial, appellate and other attorneys' fees and costs.
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g. Timing of the Determination. The Company shall use its best
efforts to make the Determination contemplated by this Section 5 promptly, but
in all events within the following time periods:
i. if the Determination is to be made by the Board or a committee
thereof, such Determination shall be made not later than 30 days after a written
request for a Deermination (a "Request") is delivered to the Company by the
Indemnitee;
ii. if the Determination is to be made by the Company's outside
independent legal counsel, such Determination shall be made not later than 30
days after a Request is delivered to the Company by the Indemnitee; and
iii. if the Determination is to be made by the Company's
shareholders, such Determination shall be made not later than 90 days after a
Request is delivered to the Company by the Indemnitee.
The failure to make a Determination within the above-specified time period shall
constitute a Determination that full indemnification is not limited or
prohibited by Section 3 hereof.
h. Shareholder Vote on Determination. In connection with each
meeting at which a Shareholder Determination will be made, the Company shall
solicit proxies that expressly include a proposal to indemnify or reimburse the
Indemnitee. Subject to the fiduciary duties of its members under applicable law,
the Board will not recommend against Indemnification or reimbursement in any
proxy statement relating to the proposal to indemnify or reimburse the
Indemnitee.
i. Right of Indemnitee to Appeal on Adverse Determination by Board
or Committee. If a Determination is made by the Board or a committee
thereof that all or any portion of a request for indemnification pursuant to
this Agreement is prohibited by Section 3 hereof, then upon the written request
of the Indemnitee, the Company shall cause a new Determination to be made by the
Company's shareholders at the next regular or special meeting of shareholders.
Such Determination by the Company's shareholders shall be binding and conclusive
for all purposes of this Agreement, but shall not preclude the Indemnitee from
seeking court-ordered indemnification or reimbursement pursuant to any provision
of the Florida Statutes or otherwise.
j. Right of Indemnitee to Select Forum for Indemnification. If at
any time subsequent to the date of this Agreement, "Continuing Directors" (as
defined below) do not constitute a majority of the members of the Board, or
there is otherwise a change in control of the Company (as contemplated by Item
403(c) of Securities and Exchange Commission Regulation S-K), then upon the
request of the Indemnitee, the Company shall cause the Determination required by
this Section 5 to be made by special legal counsel designated by the Indemnitee
and approved by the Board (which approval shall not be unreasonably withheld),
which counsel shall be deemed to satisfy the requirements of Section 5(a)(iii)
hereof. If none of the legal counsel selected by the Indemnitee
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are willing and/or able to make the Determination, then the Company shall cause
the Determination to be made a majority vote or consent of a Board committee
consisting solely of Continuing Directors. For purposes of this Agreement, a
"Continuing Director" means either a member of the Board at the date of this
Agreement or a person nominated to serve as a member of the Board by a majority
of the then Continuing Directors.
k. Access by the Indemnitee to Determination. The Company shall
afford to the Indemnitee and his representative ample opportunity to present
evidence of the facts upon which the Indemnitee relies for indemnification or
reimbursement, together with other information relating to any requested
Determination. The Company shall also afford the Indemnitee the reasonable
opportunity to include such evidence and information in any Company proxy
statement relating to a shareholder Determination.
6. Contribution.
a. If the indemnification provided in Sections 1 and 2 hereof is
unavailable and may not be paid to the Indemnitee for any reason other than
those set forth in Section 3 hereof, then in respect of any threatened, pending
or completed action, suit or proceeding in which the Company is jointly liable
with the Indemnitee (or would be joined in such action, suit or proceeding), the
Company shall contribute to the amount of expenses, judgments, fines and
settlements paid or payable by the Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company on the
one hand and the Indemnitee on the other hand from the transaction from which
such action, suit or proceeding arose, and (ii) the relative fault of the
Company on the one hand and of the Indemnitee on the other in connection with
the events that resulted in such expenses, judgments, fines or settlement
amounts, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Indemnitee on the other shall be
determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation
or any other method of allocation that does not take in to account the foregoing
equitable considerations.
b. The determination as to the amount of the contribution, if any,
shall be made by:
i. a court of competent jurisdiction upon the application of both
the Indemnitee and the Company (if an action or suit had been brought in, and
final determination had been rendered by such court);
ii. the Board by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding; or
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iii. outside independent legal counsel of the Company, if a
quorum is not obtainable for purpose of (ii) above, or, even if obtainable, a
quorum of Disinterested Directors so directs.
7. Notification and Defense of Claim. Promptly after receipt of notice
of the commencement of any action, suit or proceeding, the Indemnitee will, if a
claim in respect thereof is to be made against the Company under this Agreement,
notify the Company of the commencement thereof, but the omission to so notify
the Company will not relieve the Company from any liability that it
may have to the Indemnitee otherwise than under this Agreement. With respect to
any such action, suit or proceeding as to which the Indemnitee so notifies the
Company:
a. The Company will be entitled to participate therein at its own
expense.
b. Except as otherwise provided below, the Company may assume the
defense thereof, with counsel satisfactory to the Indemnitee. After notice from
the Company to the Indemnitee of its election to assume the defense, the Company
will not be liable to the Indemnitee under this Agreement for any legal or other
expenses subsequently incurred by the Indemnitee in connection with the defense
thereof, other than reasonable costs of investigation or as otherwise provided
below. The Indemnitee shall have the right to employ his counsel in such action,
suit or proceeding, but the fees and expenses of such counsel incurred after
notice from the Company of its assumption of the defense thereof shall be at the
expense of the Indemnitee unless: (i) the employment of counsel by the
Indemnitee has been authorized by the Company; (ii) the Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of the defense of such action; or
(iii) the Company shall not in fact have employed counsel to assume the defense
of such action, in each of which cases the fees and expenses of the Indemnitee's
counsel shall be at the expense of the Company. The Company shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of the Company or as to which the Indemnitee shall have come to the
conclusion provided for in (ii) above; and
c. The Company shall not be liable to indemnify the Indemnitee under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any action or
claim in any manner that would impose any penalty or limitation on the
Indemnitee without the Indemnitee's written consent. Neither the Company nor the
Indemnitee will unreasonably withhold its or his consent to any proposed
settlement.
8. Liability Insurance. So long as the Indemnitee shall continue to
serve as a director or officer of the Company (or shall continue at the request
of the Company to serve as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise), the Company will use its
best efforts to purchase and maintain in effect for the benefit of the
Indemnitee one or more valid, binding and enforceable policy or policies of D&O
Insurance providing coverage within limits determined by the Board in its sole
discretion. Notwithstanding the foregoing, the Company shall
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not be required to purchase or maintain such insurance policy, if, in the sole
discretion of the Board (i) such insurance is not reasonably available; (ii) the
premium cost for such insurance is disproportionate to the amount of coverage;
or (iii) the coverage provided by such insurance is so limited by exclusions
that there is insufficient benefit from such insurance.
9. Disclosure of Payments. Except as expressly required by law, neither
party shall disclose any payments under this Agreement unless prior approval of
the other party is obtained. Any payments to the Indemnitee that must be
disclosed shall, unless otherwise required by law, be described only in Company
proxy or information statements relating to special and/or annual meetings of
the Company's shareholders, and the Company shall afford the Indemnitee the
reasonable opportunity to review all such disclosures and, if requested, to
explain in such statement any mitigating circumstances regarding the events
reported.
10. Covenant Not to Xxx; Limitation of Actions and Release of Claims.
No legal action shall be brought and no cause of action shall be asserted by or
on behalf of the Company (or any of its subsidiaries) against the Indemnitee,
his spouse, heirs, personal representatives, successors or assigns after the
expiration of 2 years from the date the Indemnitee ceases (for any reason) to
serve as either a director, officer, or agent of the Company, and any claim or
cause of action of the Company (or any of its subsidiaries) shall be
extinguished and deemed released unless asserted by the filing of a legal action
within such 2-year period.
11. Continuation of Obligations. All agreements and obligations of the
Company contained herein shall continue during the period the Indemnitee is a
director, officer, employee or agent of the Company (or is serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise), and shall
continue thereafter for so long as the Indemnitee shall be subject to any
possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative, by reason of the fact that the
Indemnitee has ceased to serve in any such capacity due to his resignation,
removal by vote of directors or shareholders, termination, death, disability or
otherwise.
12. Enforcement.
a. The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order
to induce the Indemnitee to serve or to continue to serve as a director,
officer, employee and/or agent of the Company and/or a subsidiary of the
Company, and acknowledges that the Indemnitee is relying upon this Agreement in
agreeing to serve or to continue to serve in such capacity.
b. In the event the Indemnitee is required to bring any action to
enforce his rights and to collect monies due under this Agreement and is
successful in such action, the Company shall reimburse the Indemnitee for all of
the Indemnitee's reasonable fees and expenses in bringing and pursuing such
action, including reasonable attorney's fees (including trial, appellate and
other attorney's fees), court costs and other related expenses.
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13. Miscellaneous.
a. Cooperation and Intent. The Company shall cooperate in good
faith with the Indemnitee and use its best efforts to ensure that the Indemnitee
is indemnified and/or reimbursed for expenses as described herein to the fullest
extent permitted under the provisions of this Agreement.
b. Nonexclusivity; Subrogation; Entire Agreement. The rights of
indemnification and reimbursement provided in this Agreement shall be in
addition to any rights by which the Indemnitee may otherwise be entitled by the
Florida Statutes, the Articles, the Bylaws, a vote of the Company's
shareholders, or otherwise. In the event of any payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee, who shall execute all papers required and
take all action necessary to secure such rights, including the execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights. The Company shall not be liable under this Agreement to make any payment
of amounts otherwise indemnifiable hereunder if and to the extent that the
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise. This Agreement constitutes the entire
agreement between the Company and the Indemnitee with respect to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, both written and oral, between the parties hereto with respect
to such subject matter (the "Prior Agreements"); provided, however, that if this
Agreement shall ever be held void or unenforceable for any reason whatsoever,
and is not reformed pursuant to Section 13(d) hereof, then (i) this Agreement
shall not be deemed to have superseded any Prior Agreements; (ii) all
of such Prior Agreements shall be deemed to be in full force and effect
notwithstanding the execution of this Agreement; and (iii) the Indemnitee shall
be entitled to maximum indemnification benefits provided under the Florida
Statute, the Articles, the Bylaws, a vote of Company's shareholders, or any
Prior Agreements.
c. Effective Date. The provisions of this Agreement shall cover
claims, actions, suits, and proceedings whether now pending or hereafter
commenced and shall be retroactive to cover acts or omissions or alleged acts or
omissions that heretofore have taken place.
d. Severability; Reformation. Each of the provisions of this
Agreement is a separate and distinct agreement and independent of the others, so
that if any provision hereof shall be held to be invalid or unenforceable in
whole or in part for any reason, such invalidity or unenforceability shall not
affect the validity or enforceability of the other provisions hereof. In the
event that all or any portion of this Agreement is ever held void or
unenforceable by a court of competent jurisdiction, then the parties hereto
hereby expressly authorize such court to modify any provision(s) held void or
unenforceable to the extent, and only to the extent, necessary to render it
valid and enforceable.
e. 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 is directed, or (ii) mailed by certified or registered mail,
postage prepaid, on the third business day after the date on which it is so
mailed:
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If to the Indemnitee: To the address set forth on the signature page hereof.
If to the Company: Aviation Holdings Group, Inc.
00000 X.X. 00 Xxxxxx
Xxxxx, XX 00000
or to such other address as may have been furnished by either party to the
other.
f. Amendments or Modification. This Agreement may not be amended or
modified in any way except by a written instrument executed by all of the
parties.
g. Governing Law. This Agreement shall be governed by, interpreted
and enforced in accordance with the laws of the State of Florida, without giving
effect to the principles of conflicts of law thereof.
h. Successor and Assigns. This Agreement shall be binding, upon the
Indemnitee and the Company, its successors and assigns, and shall inure to the
benefit of the Indemnitee, his heirs, personal representatives, successors and
assigns and to the benefit of the Company, its successors and assigns.
i. 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.
j. Headings. The headings of the sections 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
AVIATION HOLDINGS GROUP, INC.
BY:
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Xxxxxx Xxxxxx, President
THE INDEMNITEE:
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Address:
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