EMPLOYMENT AND NON-COMPETITION AGREEMENT
Exhibit
10.7
THIS
EMPLOYMENT AND NON-COMPETITION AGREEMENT, is entered into as of this 2nd day
of December, 2009 by and between Pioneer Power Solutions, Inc. (the “Company”),
a Delaware corporation, c/o Provident Industries, c/o Clinton Group, 0 Xxxx
00xx
Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Xxxxxx Xxxxxxx, c/o Provident Industries,
c/o Clinton Group, 0 Xxxx 00xx
Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Executive”).
W I T N E S S E T
H:
WHEREAS,
the Company desires to employ the Executive and the Executive desires to be
employed by the Company; and
WHEREAS,
the Company and the Executive desire to set forth the terms and conditions of
such employment.
NOW
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the adequacy and receipt
of which is hereby acknowledged, the parties hereto agree as
follows:
1. Term of Employment.
The Company hereby agrees to employ the Executive and the Executive hereby
accepts employment, in accordance with the terms and conditions set forth
herein, for a term (the “Employment Term”) commencing on the date of the
consummation of the share exchange by and among the Company, Pioneer
Transformers Ltd. and Provident Pioneer Partners, L.P., a Delaware limited
partnership (the “Share Exchange”), and terminating, unless otherwise terminated
earlier in accordance with Section 5 hereof, on the third anniversary of the
Share Exchange (the “Original Employment Term”), provided that the Employment
Term shall be automatically extended, subject to earlier termination as provided
in Section 5 hereof, for successive additional two (2) year periods (the
“Additional Terms”), unless, at least one hundred eighty (180) days prior to the
end of the Original Employment Term or the then Additional Term, the Company or
the Executive has notified the other in writing that the Employment Term shall
terminate at the end of the then current term.
2. Position and
Responsibilities. During the Employment Term, the Executive shall serve
as the Chief Executive Officer and Chief Financial Officer of the Company and
the Executive shall report exclusively to the Board of Directors of the Company
(the “Board”). During the Employment Term, the Company shall recommend the
Executive for election as a director. The Executive shall have all of the
duties, authorities, powers and responsibilities commensurate with all of the duties, authorities, powers and responsibilities of a
chief executive officer. The Executive shall devote substantially all of his
business time, attention and energies to the performance of his duties
hereunder, provided that the foregoing shall not prevent the Executive from
participating in charitable, community or industry affairs, from managing his
and his family’s personal investments and from serving on the boards of
directors of not-for-profit companies to the extent such activities do not
interfere with the performance of his duties hereunder.
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3. Compensation and Benefits. The
Company shall pay and provide the Executive the following:
3.1. Base Salary. The
Company shall pay the Executive a base salary (the “Base Salary”) at an annual
rate of not less than Two Hundred Fifty Thousand Dollars ($250,000) per year in
accordance with the Company’s normal payroll practices for senior executives.
Base Salary shall be increased to Two Hundred Seventy-Five Thousand Dollars
($275,000) and to Three Hundred Thousand Dollars ($300,000) on the first and
second anniversaries, respectively, of the date hereof. Once
increased, Base Salary shall not be reduced and shall thereafter, as increased,
shall be the Base Salary hereunder.
3.2. Annual Bonus. In
addition to the Base Salary set forth in 3.1 above, the Executive shall be
entitled to such bonus compensation as the Board may determine from time to time
in its sole discretion, but not to exceed 50% of the Executive’s Base Salary
(which percentage may be increased in the discretion of the Board).
3.3. Employee Benefits.
The Executive shall, to the extent eligible, be entitled to participate at a
level commensurate with his position in all employee benefit, fringe benefit,
welfare, retirement, savings and incentive plans and programs generally provided
by the Company to its senior executives from time to time.
3.4. Vacation. The
Executive shall be entitled to paid vacation in accordance with the standard
written policies of the Company with regard to vacations of senior executives,
but in no event less than six (6) weeks per calendar year (with proration for
partial years).
4. Expenses. Upon
submission of appropriate documentation, the Company shall pay, or reimburse,
the Executive for all ordinary and necessary business expenses (including, but
not limited to, travel and entertainment expenses) which the Executive incurs in
connection with the performance of his duties hereunder.
5. Termination of Employment
and the Employment Term. The Executive’s employment with the Company and
the Employment Term shall terminate upon the occurrence of the first of the
following events:
5.1. Death. Automatically
on the date of the Executive’s death.
5.2. Disability. Upon
thirty (30) days’ written notice by the Company to the Executive of a
termination due to Disability, provided such notice is delivered during the
period of Disability. “Disability” shall mean the inability of the Executive,
due to injury, illness, disease or bodily or mental infirmity, to engage in the
performance of his material duties hereunder for a period of more than one
hundred eighty (180) days in any twelve (12) month period.
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5.3. For Cause.
Immediately upon written notice by the Company to the Executive of a termination
for Cause, provided such notice is given within ninety (90) days after the
discovery by the Board of the Cause event and has been approved by at least
two-thirds of the directors then in office (other than the Executive) at a
meeting at which the Executive and his counsel had the right to appear and
address after receiving at least five (5) business days written notice of the
meeting and reasonable detail of the facts and circumstances claimed to provide
a basis for such termination. “Cause” shall mean: (i) an act or acts of willful
and material misrepresentation, fraud or willful dishonesty (other than good
faith expense account disputes) by the Executive which is intended to result in
his substantial personal enrichment at the expense of the Company; (ii) any
willful misconduct by the Executive with regard to the Company that has a
material adverse impact on the Company; (iii) any material, willful and knowing
violation by the Executive of any fiduciary duties owed by him to the Company
which has a material adverse impact on the Company; (iv) the Executive’s
conviction of, or pleading nolo contendere or guilty to, a felony (other than
(x) a traffic infraction or (y) vicarious liability solely as a result of his
position provided that the Executive did not have actual knowledge of the
actions or inactions creating the violation of the law or the Executive relied
in good faith on the advice of counsel with regard to the legality of such
action or inaction); or (v) any other material breach by the
Executive of this Agreement that is not cured by the Executive within twenty
(20) days after receipt by the Executive of a written notice from the Company of
such breach specifying the details thereof. No action or inaction should be
deemed willful if not demonstrably willful and if taken or not taken by the
Executive in good faith as not being adverse to the best interests of the
Company. Reference in this Section 5.3 to the Company shall also include direct
and indirect subsidiaries of the Company.
5.4. Without
Cause. Upon sixty (60) days’ written notice by the Company to
the Executive of a termination Without Cause. “Without Cause” shall mean any
reason other than death of the Executive, Disability or Cause. In the
event the Company terminates the Executive’s employment pursuant to this Section
5.4, the Company shall continue to pay the Executive the Base Salary for the
remainder of the Original Employment Term or the Additional Term, as the case
may be, as if this Agreement had not been previously terminated pursuant to this
Section 5.4.
6. Non-Competition/Non-Solicitation.
6.1. Non-Competition. The
Executive agrees that during the Specified Period (as defined below), the
Executive shall not, directly or indirectly, be engaged as a principal in any
other business, activity or conduct which competes with the business of the
Company (or be an employee, consultant, director, principal, shareholder or
adviser of, or otherwise be affiliated with, any such business, activity or
conduct), provided that competition shall not include: (i) holding five percent
(5%) or less of an interest in the equity or debt of any publicly traded
company, (ii) engaging in any activity with the prior written approval of the
Board, or (iii) being involved only in a noncompeting portion of a business
which is in competition with the business of the Company (but only if such
non-competing portion of the business is conducted as a separate business unit,
and the Executive has no direct or indirect involvement with the operations of
the competing business unit (with the burden of so demonstrating being on the
Executive) and the foregoing shall not affect the Executive’s obligations of
confidentiality). For purposes of this Section 6, “Company” shall mean the
Company and its subsidiaries and affiliates. The “Specified Period” means the
Executive’s period of employment and the four (4) year period thereafter,
provided that in the event the Executive is terminated without Cause or due to
his Disability or the Executive voluntarily terminates his employment following
a breach by the Company of this Agreement, the Specified Period will terminate
two (2) years after the termination of his employment.
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6.2. Non-Solicitation. The
Executive agrees that during the Specified Period the Executive shall not,
directly or indirectly, (i) solicit any customer, client, supplier, or middleman
of the Company or induce any customer, client, supplier, or middleman of the
Company to terminate, or otherwise to cease, reduce, or diminish in any way its
relationship with the Company or (ii) solicit or induce, or attempt to solicit
or induce, any non-clerical employee(s), sales representative(s), agent(s), or
consultant(s) of the Company to terminate such person’s employment,
representation or other association with the Company for the purpose of
affiliating with any entity with which the Executive is associated.
6.3. Confidentiality. The
Executive specifically acknowledges that any trade secrets or confidential
business and technical information of the Company or its vendors, suppliers or
customers, whether reduced to writing, maintained on any form of electronic
media, or maintained in mind or memory and whether compiled by the Executive or
the Company (collectively, “Confidential Information”), derives independent
economic value from not being readily known to or ascertainable by proper means
by others; that reasonable efforts have been made by the
Company to maintain the secrecy of such information; that such information is
the sole property of the Company or its vendors, suppliers, or customers and
that any retention, use or disclosure of such information by the Executive
during the Employment Term (except in the course of performing duties and
obligations of employment with the Company) or any time after termination
thereof, shall constitute misappropriation of the trade secrets of the Company
or its vendors, suppliers, or customers, provided that Confidential Information
shall not include: (i) information that is at the time of disclosure public
knowledge or generally known within the industry; (ii) information deemed in
good faith by the Executive, while employed by the Company, desirable to
disclose in the course of performing the Executive’s duties; (iii) information
the disclosure of which the Executive in good xxxxx xxxxx necessary in defense
of the Executive’s rights provided such disclosure by the Executive is limited
to only disclose as necessary for such purpose; or (iv) information disclosed by
the Executive to comply with a court, or other lawful compulsory, order
compelling him to do so, provided the Executive gives the Company prompt notice
of the receipt of such order and the disclosure by the Executive is limited to
only disclosure necessary for such purpose.
6.4. Return of Property.
Upon the termination of the Executive’s employment or at any other time upon
written request by the Company, the Executive shall promptly deliver to the
Company all records, files, memoranda, designs, data, reports, drawings, plans,
computer programs, software and other documents (and all copies or reproductions
of such materials in his possession or control) belonging to the Company.
Notwithstanding the foregoing, the Executive may retain his rolodex, Microsoft
Outlook Contacts file or similar electronic file and similar phone directories
(collectively, the “Rolodex”), to the extent the Rolodex does not contain
information other than name, address, telephone number, e-mail address and
similar information.
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6.5. Scope of
Restrictions/Remedies. If, at the time of enforcement of this Section 6,
a court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. In the event of a material breach or threatened
material breach of this Section 6, the Company, in addition to its other
remedies at law or in equity, shall be entitled to injunctive or other equitable
relief in order to enforce or prevent any violations of the provisions of this
Section 6. The Company agrees that it will not assert to enjoin or otherwise
limit the Executive’s activities based on an argument of inevitable disclosure
of confidential information. Upon written request of the Executive, the Company
shall within thirty (30) days notify the Executive in writing whether or not in
good faith it believes that any proposed activities would be in competition and,
if it so determines that such activity is not in competition or does not reply
within thirty (30) days, the Company shall be deemed to waive any right to treat
such activities as competition under Section 6.1 hereof unless the facts are
otherwise than as presented by the Executive or there is a change thereafter in
such activities.
7. Indemnification/Liability
Insurance. The Company shall concurrently with the execution and delivery
of this Agreement enter into an Indemnification Agreement with the Executive (in
substantially the same form attached as Appendix A hereto).
The Company shall cover the Executive under directors and officers liability
insurance both during and, while potential liability exists, after the
Employment Term in the same amount and to the same extent, if any, as the
Company covers its other officers and directors.
8. Assignment. This
Agreement may and shall be assigned or transferred to, and shall be binding upon
and shall inure to the benefit of, any Successor of the Company, and any such
Successor shall be deemed substituted for all purposes of the “Company” under
the terms of this Agreement. “Successor” shall mean any person, firm,
corporation or business entity which at any time, whether by merger, share
exchange, purchase, or otherwise, acquires all or substantially all of the
assets of the Company. Notwithstanding such assignment, the Company shall
remain, with such successor, jointly and severally liable for all its
obligations hereunder. Except as herein provided, this Agreement may not
otherwise be assigned by the Company. This Agreement is not assignable by the
Executive. This Agreement shall inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, and
administrators, successors, heirs, distributees, devisees, and legatees. If the
Executive should die after a termination while any amounts payable to the
Executive hereunder remain outstanding, all such amounts, unless otherwise
provided herein, shall be paid to the Executive’s devisee, legatee, or other
designee or, in the absence of such designee, to the Executive’s
estate.
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9. Legal
Remedies.
9.1. Notices. All notices
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by hand, or one (1) day after sending by express mail or other
“overnight mail service,” or three (3) days after sending by certified or
registered mail, postage prepaid, return receipt requested. Notice shall be sent
as follows: if to the Executive, to the address as listed in the Company’s
records, and if to the Company, to the address set forth on the first page of
this Agreement, attention of Chief Financial Officer. Either party may change
the notice address by notice given as aforesaid.
9.2. Arbitration. All
disputes and controversies arising under or in connection with this Agreement,
other than the seeking of injunctive or other equitable relief pursuant to
Section 6 hereof, shall be settled exclusively by arbitration in New York City,
New York, or such other location agreed by the parties hereto, in accordance
with the rules for expedited resolution of commercial disputes of the American
Arbitration Association (“AAA”) then in effect. The determination of the
arbitrators shall be final and binding on the parties. Judgment may be entered
on the award of the arbitrator in any court having proper jurisdiction. All
expenses of the AAA and the arbitrator shall be borne as determined by the
arbitrator.
10. Miscellaneous.
10.1. Entire Agreement.
This Agreement supersedes any prior agreements or understandings, oral or
written, between the parties hereto with respect to the subject matter
hereof.
10.2. Modification. This
Agreement shall not be varied, altered, modified, canceled, changed, or in any
way amended, nor any provision hereof waived, except by mutual agreement of the
parties in a written instrument executed by the parties hereto or their legal
representatives.
10.3. Severability. In the
event that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable for any reason, the remaining provisions of this
Agreement shall be unaffected thereby and shall remain in full force and
effect.
10.4. Counterparts. This
Agreement may be executed in two (2) or more counterparts, each of which shall
be deemed to be an original, but all of which together will constitute one and
the same Agreement.
10.5. Tax Withholding. The
Company may withhold from any benefits payable under this Agreement all federal,
state, city, or other taxes as may be required pursuant to any law or
governmental regulation or ruling.
10.6. Governing Law. The
provisions of this Agreement shall be construed and enforced in accordance with
the laws of the state of New York, without regard to any otherwise applicable
principles of conflicts of laws.
[Signature
page follows immediately]
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IN
WITNESS WHEREOF, the Executive and the Company have executed this Agreement, as
of the day and year first above written.
By: /s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Chief Executive Officer
EXECUTIVE
/s/ Xxxxxx X.
Xxxxxx
Xxxxxx X.
Xxxxxxx
[Signature page to Employment
Agreement]
APPENDIX
A
INDEMNIFICATION
AGREEMENT
THIS
INDEMNIFICATION AGREEMENT is entered into as of this 2nd day
of December, 2009, by and between Pioneer Power Solutions, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxxx ("Indemnitee").
RECITALS
A. The
Company is aware that because of the increased exposure to litigation costs,
talented and experienced persons are increasingly reluctant to serve or continue
serving as directors and officers of corporations unless they are protected by
comprehensive liability insurance and indemnification.
B. The
statutes and judicial decisions regarding the duties of directors and officers
are often difficult to apply, ambiguous, or conflicting, and therefore fail to
provide such directors and officers with adequate guidance regarding the proper
course of action.
C. The
Board of Directors of the Company (the "Board") has concluded that, to retain
and attract talented and experienced individuals to serve as officers and
directors of the Company and its subsidiaries and to encourage such individuals
to take the business risks necessary for the success of the Company and its
subsidiaries, the Company should contractually indemnify its officers and
directors, and the officers and directors of its subsidiaries, in connection
with claims against such officers and directors in connection with their
services to the Company and its subsidiaries, and has further concluded that the
failure to provide such contractual indemnification could be detrimental to the
Company, its subsidiaries and stockholders.
NOW,
THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:
1. Definitions.
(a) Agent. "Agent" with
respect to the Company means any person who is or was a director, officer,
employee or other agent of the Company or a Subsidiary of the Company; or is or
was serving at the request of, for the convenience of, or to represent the
interests of, the Company or a Subsidiary of the Company as a director, officer,
employee or agent of another entity or enterprise; or was a director, officer,
employee or agent of a predecessor corporation of the Company or a Subsidiary of
the Company, or was a director, officer, employee or agent of another entity or
enterprise at the request of, for the convenience of, or to represent the
interests of such predecessor corporation.
(b) Expenses. "Expenses"
means all direct and indirect costs of any type or nature whatsoever (including,
without limitation, all attorneys' fees, costs of investigation and related
disbursements) incurred by the Indemnitee in connection with the investigation,
settlement, defense or appeal of a claim or Proceeding covered hereby or
establishing or enforcing a right to indemnification under this
Agreement.
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(c) Proceeding.
"Proceeding" means any threatened, pending, or completed claim, suit or action,
whether civil, criminal, administrative, investigative or
otherwise.
(d) Subsidiary.
"Subsidiary" means any corporation or other entity of which more than 10% of the
outstanding voting securities or interests is owned directly or indirectly by
the Company, and one or more other Subsidiaries, taken as a whole.
2. Maintenance of Liability
Insurance.
(a) The
Company hereby covenants and agrees with Indemnitee that, subject to Section
2(b), the Company shall obtain and maintain in full force and effect directors'
and officers' liability insurance ("D&O Insurance") in reasonable amounts as
the Board of Directors shall determine from established and reputable insurers,
but no less than the amounts in effect upon initial procurement of the D&O
Insurance. In all policies of D&O Insurance, Indemnitee shall be named as an
insured.
(b) Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain
D&O Insurance if the Company determines in good faith that the premium costs
for such insurance are (i) disproportionate to the amount of coverage provided
after giving effect to exclusions, and (ii) substantially more burdensome to the
Company than the premiums charged to the Company for its initial D&O
Insurance.
3. Mandatory
Indemnification. The Company shall defend, indemnify and hold harmless
Indemnitee:
(a) Third Party Actions.
If Indemnitee is a person who was or is a party or is threatened to be made a
party to any Proceeding (other than an action by or in the right of the Company)
by reason of the fact that Indemnitee is or was or is claimed to be an Agent of
the Company, or by reason of anything done or not done by Indemnitee in any such
capacity, against any and all Expenses and liabilities of any type whatsoever
(including, but not limited to, legal fees, judgments, fines, ERISA excise taxes
or penalties, and amounts paid in settlement) incurred by such person in
connection with the investigation, defense, settlement or appeal of such
Proceeding, so long as Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
Proceeding, had no reasonable cause to believe such person's conduct was
unlawful.
(b) Actions by or in the Right
of the Company. If Indemnitee is a person who was or is a party or is
threatened to be made a party to any Proceeding by or in the right of the
Company by reason of the fact that he is or was an Agent of the Company, or by
reason of anything done or not done by him in any such capacity, against any and
all Expenses and liabilities or any type whatsoever (including, but not limited
to, legal fees, judgments, fines, ERISA excise taxes or penalties, and amounts
paid in settlement) incurred by such person in connection with the
investigation, defense, settlement or appeal of such Proceeding, so long as the
Indemnitee acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company; except
that no indemnification under this subsection shall be made, and Indemnitee
shall repay all amounts previously advanced by the Company, in respect of any
claim, issue or matter for which such person is judged in a final,
non-appealable decision to be liable to the Company by a court of competent
jurisdiction, unless and only to the extent that the court in which such
Proceeding was brought shall determine that Indemnitee is fairly and reasonably
entitle to indemnity.
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(c) Actions Where Indemnitee Is
Deceased. If Indemnitee is a person who was or is a party or is
threatened to be made a party to any Proceeding by reason of the fact that he is
or was an Agent of the Company, or by reason of anything done or not done by him
in any such capacity, and prior to, during the pendency of, or after completion
of, such Proceeding, the Indemnitee shall die, then the Company shall defend,
indemnify and hold harmless the estate, heirs and legatees of the Indemnitee
against any and all Expenses and liabilities incurred by or for such persons or
entities in connection with the investigation, defense, settlement or appeal of
such Proceeding on the same basis as provided for the Indemnitee in Sections
3(a) and 3(b) above.
The
Expenses and liabilities covered hereby shall be net of any payments by D&O
Insurance carriers or others.
4. Partial
Indemnification. If Indemnitee is found under Section 3, 7 or 10 hereof
not to be entitled to indemnification for all of the Expenses and liabilities
relating to a Proceeding, the Company shall indemnify the Indemnitee for any
portion of such Expenses not specifically precluded by the operation of such
Section 3, 7 or 10.
6. Indemnification
Procedures.
(a) Promptly
after receipt by Indemnitee of notice to him of the commencement or threat of
any Proceeding or claim covered hereby, Indemnitee shall notify the Company of
the commencement or threat thereof, provided that any failure to so notify shall
not relieve the Company of any of its obligations hereunder, except to the
extent that such failure or delay increases the liability of the Company
hereunder.
(b) If,
at the time of the receipt of a notice pursuant to Section 6(a) above, the
Company has D&O Insurance in effect, the Company shall give prompt notice of
the Proceeding or claim to its insurers in accordance with the procedures set
forth in the applicable policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay all amounts payable
as a result of such Proceeding or claim in accordance with the terms of such
policies, and Indemnitee shall not take any action (by waiver, settlement or
otherwise) which would adversely affect the ability of the Company to obtain
payment from its insurers.
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(c) If
the Company shall be obligated to pay the Expenses of Indemnitee, the Company
may (and shall if requested by Indemnitee in writing) assume the defense of the
Proceeding to which the Expenses relate, in which event the Company shall
deliver a notice of assumption to Indemnitee. Any counsel employed by the
Company in connection with the defense of such Proceeding shall be subject to
approval by Indemnitee, such approval not to be unreasonably withheld or
delayed. The Company will not be liable to Indemnitee under this Agreement for
any fees or expenses of counsel incurred by Indemnitee after delivery of such
notice of assumption with respect to such Proceeding; provided; however, that if Indemnitee shall have provided the
Company with an opinion of counsel stating that there is a strong argument that
a conflict of interest exists between the Company and Indemnitee in the conduct
of any such defense, the fees and Expenses of Indemnitee's counsel shall be at
the expense of the Company. Notwithstanding the fact that the Company assumes
the defense of a Proceeding pursuant to the preceding sentence, Indemnitee shall
have the right to employ his or her own counsel in any such Proceeding at
Indemnitee's expense.
7. Determination of Right to
Indemnification.
(a) To
the extent Indemnitee has been successful on the merits or otherwise in defense
of any Proceeding, claim, issue or matter covered hereby, Indemnitee need not
repay any of the Expenses advanced in connection with the investigation, defense
or appeal of such Proceeding.
(b) If
Section 7(a) is inapplicable, the Company shall remain obligated to indemnify
Indemnitee, and Indemnitee need not repay Expenses previously advanced, unless
the Company, by motion before a court of competent jurisdiction, obtains an
order for preliminary or permanent relief suspending or denying the obligation
to advance or indemnify for Expenses.
(c) Notwithstanding
any other provision in this Agreement to the contrary, the Company shall
indemnify Indemnitee against all Expenses incurred by Indemnitee in connection
with any Proceeding under Section 7(b) and against all Expenses incurred by
Indemnitee in connection with any other Proceeding between the Company and
Indemnitee involving the interpretation or enforcement of the rights of
Indemnitee under this Agreement unless a court of competent jurisdiction finds
that the material claims and/or defenses of Indemnitee in any such Proceeding
were frivolous or made in bad faith.
8. Certificate of Incorporation
and Bylaws. The Company agrees that the Company's Certificate of
Incorporation and Bylaws in effect on the date hereof shall not be amended to
reduce, limit, hinder or delay (i) the rights of Indemnitee granted hereby, or
(ii) the ability of the Company to indemnify Indemnitee as required
hereby.
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10. Exceptions.
Notwithstanding any other provision hereunder to the contrary, the Company shall
not be obligated pursuant to the terms of this Agreement:
(a) Claims Initiated by
Indemnitee. To indemnify or advance Expenses to Indemnitee with respect
to Proceedings or claims initiated or brought voluntarily by Indemnitee and not
by way of defense (other than Proceedings brought to establish or enforce a
right to indemnification under this Agreement or the provisions of the Company's
Certificate of Incorporation or Bylaws unless a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in such
Proceeding were not made in good faith or were frivolous).
(b) Unauthorized
Settlements. To indemnify Indemnitee under this Agreement for any amounts
paid in settlement of a Proceeding covered hereby without the prior written
consent of the Company to such settlement.
11. Non-exclusivity. This
Agreement is not the exclusive arrangement between the Company and Indemnitee
regarding the subject matter hereof and shall not diminish or affect any other
rights which Indemnitee may have under any provision of law, the Company's
Certificate of Incorporation or By-laws, under other agreements, or
otherwise.
12. Continuation After
Term. Indemnitee's rights hereunder shall continue after the Indemnitee
has ceased acting as a director or Agent of the Company and the benefits hereof
shall inure to the benefit of the heirs, executors and administrators of
Indemnitee.
13. Severability. If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable, provisions of the Agreement shall not in any way be affected
or impaired thereby, and to the fullest extent possible, the provisions of this
Agreement shall be construed or altered by the court so as to remain enforceable
and to provide Indemnitee with as many of the benefits contemplated hereby as
are permitted under law.
15. Notices. All notices,
demands, consents, requests, approvals and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been
properly given if hand delivered (effective upon receipt or when refused), or if
sent by a courier freight prepaid (effective upon receipt or when refused), in
the case of the Company, at the addresses listed below, and in the case of
Indemnitee, at Indemnitee's address of record at the office of the Company, or
to such other addresses as the parties may notify each other in
writing.
A-5
|
c/o
Provident Industries, Inc.
c/o
Clinton Group
0
Xxxx 00xx
Xxxxxx, 00xx
Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
Attention:
Chief Financial Officer
|
|
|
To
Indemnitee:
|
At
the Indemnitee's residence address and facsimile number on the records of
the Company from time to time.
|
18. Governing Law. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York.
[Signature page follows
immediately]
A-6
IN
WITNESS WHEREOF, the parties hereto have entered into this Indemnification
Agreement effective as of the date first above written.
By: /s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Chief Executive Officer
EXECUTIVE
/s/ Xxxxxx X.
Xxxxxx
Xxxxxx X.
Xxxxxxx
[Signature
page to Indemnification Agreement]
