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EXHIBIT 10(b)
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT made this ___ day of ______ 200_,
between Xxxxx Industries, Inc., an Ohio corporation (the "Company") and
______________, a director, officer, employee, agent or representative (as
hereinafter defined) of the Company (the "Indemnitee").
R E C I T A L S:
A. The Company and the Indemnitee are each aware of the exposure to
litigation of officers, directors, employees, agents and representatives of the
Company as such persons exercise their duties to the Company;
B. The Company and the Indemnitee are also aware of conditions in the
insurance industry that have affected and may continue to affect the Company's
ability to obtain appropriate liability insurance on an economically acceptable
basis;
C. The Company desires to continue to benefit from the services of
highly qualified, experienced and otherwise competent persons such as the
Indemnitee;
D. The Indemnitee desires to serve or to continue to serve the Company
as a director, officer, employee, or agent or as a director, officer, employee,
agent, or trustee of another corporation, joint venture, trust or other
enterprise in which the Company has a direct or indirect ownership interest, for
so long as the Company continues to provide, on an acceptable basis, adequate
and reliable indemnification against certain liabilities and expenses which may
be incurred by the Indemnitee.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. INDEMNIFICATION. The Company shall indemnify the Indemnitee with
respect to his activities as a director, officer, employee or agent of the
Company and/or as a person who is serving or has served at the request of the
Company ("representative") as a director, officer, employee, agent or trustee of
another corporation, joint venture trust or other enterprise, domestic or
foreign, in which the Company has a direct or indirect ownership interest (an
"affiliated entity") against expenses (including, without limitation, attorneys'
fees, judgments, fines and amounts paid in settlement) actually and reasonably
incurred by him ("Expenses") in connection with any claim against Indemnitee
which is the subject of any threatened, pending or completed action, suit or
other type of proceeding, whether civil, criminal, administrative, investigative
or otherwise and whether formal or informal (a "Proceeding"), to which
Indemnitee was, is or is threatened to be made a party by reason of facts which
include Indemnitee's being or having been such a director, officer, employee,
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agent or representative, to the extent of the highest and most advantageous to
the Indemnitee, as determined by the Indemnitee, of one or any combination of
the following:
(a) The benefits provided by the Company's Amended Code of
Regulations ("Regulations") in effect on the date hereof, a copy of the relevant
portions of which are attached hereto as Exhibit A;
(b) The benefits provided by the Amended and Restated Articles
of Incorporation, Regulations or their equivalent of the Company in effect at
the time Expenses are incurred by Indemnitee;
(c) The benefits allowable under Ohio law in effect at the
date hereof;
(d) The benefits allowable under the law of the jurisdiction
under which the Company exists at the time Expenses are incurred by the
Indemnitee;
(e) The benefits available under any liability insurance
obtained by the Company; and
(f) Such other benefits as are or may be otherwise available
to Indemnitee.
Combination of two or more of the benefits provided by (a) through (f)
shall be available to the extent that the Applicable Document, as hereafter
defined, does not require that the benefits provided therein be exclusive of
other benefits. The document or law providing for the benefits listed in items
(a) through (f) above is called the "Applicable Document" in this Agreement.
Company hereby undertakes to use its best efforts to assist Indemnitee, in all
proper and legal ways, to obtain the benefits selected by Indemnitee under item
(a) through (f) above.
For purposes of this Agreement, references to "other enterprises" shall
include employee benefit plans for employees of the Company or of any affiliated
entity without regard to ownership of such plans; references to "fines" shall
include any excise taxes assessed on the Indemnitee with respect to any employee
benefit plan; references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company
which imposes duties on, or involves services by, the Indemnitee with respect to
an employee benefit plan, its participants or beneficiaries; references to the
masculine shall include the feminine; references to the singular shall include
the plural and vice versa; and if the Indemnitee 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, he shall be deemed to have acted in a
manner consistent with the standards required for indemnification by the Company
under the Applicable Documents.
2. INSURANCE. The Company may, but need not, maintain liability
insurance for so long as Indemnitee's services are covered hereunder, provided
and to the extent that such insurance is available on a basis acceptable to the
Company. However, the Company agrees that the provisions
hereof shall remain in effect regardless of whether liability or other insurance
coverage is at any time obtained or retained by the Company; except that any
payments in fact made to Indemnitee under
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an insurance policy obtained or retained by the Company shall reduce the
obligation of the Company to make payments hereunder by the amount of the
payments made under any such insurance policy.
3. PAYMENT OF EXPENSES. At Indemnitee's request, after receipt of
written notice pursuant to Section 6 hereof and an undertaking in the form of
Exhibit B attached hereto by or on behalf of Indemnitee to repay such amounts so
paid on Indemnitee's behalf if it shall ultimately be determined under the
Applicable Document that Indemnitee is not entitled to be indemnified by the
Company for such Expenses, the Company shall pay the Expenses as and when
incurred by Indemnitee. That portion of Expenses which represents attorneys'
fees and other costs incurred in defending any proceeding shall be paid by the
Company within thirty (30) days of its receipt of such request, together with
reasonable documentation (consistent, in the case of attorneys' fees, with
Company practice in payment of legal fees) evidencing the amount and nature of
such Expenses, subject to its also having received such a notice and
undertaking.
4. ADDITIONAL RIGHTS. The indemnification provided in this Agreement
shall not be exclusive of any other indemnification or right to which Indemnitee
may be entitled and shall continue after Indemnitee has ceased to occupy a
position as an officer, director, employee, agent or representative as described
in Section 1 above with respect to Proceedings relating to or arising out of
Indemnitee's acts or omissions during his service in such position.
5. NOTICE TO COMPANY. Indemnitee shall provide to the Company prompt
written notice of any Proceeding brought, threatened, asserted or commenced
against Indemnitee with respect to which Indemnitee may assert a right to
indemnification hereunder; provided that failure to provide such notice shall
not, in any way, limit Indemnitee's rights under this Agreement.
6. COOPERATION IN DEFENSE AND SETTLEMENT. Indemnitee shall not make any
admission or effect any settlement without the Company's written consent unless
Indemnitee shall have determined to undertake his own defense in such matter and
has waived the benefits of this Agreement. The Company shall not settle any
Proceeding to which Indemnitee is a party in any manner which would impose any
Expense on Indemnitee without his written consent. Neither Indemnitee nor the
Company will unreasonably withhold consent to any proposed settlement.
Indemnitee and the Company shall cooperate to the extent reasonably possible
with each other and with the Company's insurers, in attempts to defend and/or
settle such Proceeding.
7. ASSUMPTION OF DEFENSE. Except as otherwise provided below, to the
extent that it may wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume Indemnitee's defense in any
Proceeding, with counsel mutually satisfactory to Indemnitee and the Company.
After notice from the Company to Indemnitee of the Company's election so to
assume such defense, the Company will not be liable to Indemnitee under this
Agreement for 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 counsel in such
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 Indemnitee's
expense unless:
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(a) The employment of counsel by Indemnitee has been
authorized by the Company;
(b) Counsel employed by the Company initially is unacceptable
or later becomes unacceptable to Indemnitee and such unacceptability is
reasonable under then existing circumstances;
(c) Indemnitee shall have reasonably concluded that there may
be a conflict of interest between Indemnitee and the Company in the conduct of
the defense of such Proceeding; or
(d) The Company shall not have employed counsel promptly to
assume the defense of such Proceeding, in each of which cases the fees and
expenses of counsel shall be at the expense of the Company and subject to
payment pursuant to this Agreement. The Company shall not be entitled to assume
the defense of Indemnitee in any Proceeding brought by or on behalf of the
Company or as to which Indemnitee shall have made either of the conclusions
provided for in clause (b) or (c) above.
8. ENFORCEMENT. In the event that any dispute or controversy shall
arise under this Agreement between Indemnitee and the Company with respect to
whether the Indemnitee is entitled to indemnification in connection with any
Proceeding or with respect to the amount of Expenses incurred, then with respect
to each such dispute or controversy Indemnitee may seek to enforce the Agreement
through legal action or, at Indemnitee's sole option and request, through
arbitration. If arbitration is requested, such dispute or controversy shall be
submitted by the parties to binding arbitration in the City of Akron, State of
Ohio, before a single arbitrator agreeable to both parties; provided that
indemnification in respect of any claim, issue or matter in a Proceeding brought
against Indemnitee by or in the right of the Company and as to which Indemnitee
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Company shall be submitted to arbitration only to
the extent permitted under the Company's Code of Regulations and applicable law
then in effect. If the parties cannot agree on a designated arbitrator within 15
days after arbitration is requested in writing by either of them, the
arbitration shall proceed in the City of Akron, State of Ohio, before an
arbitrator appointed by the American Arbitration Association. In either case,
the Arbitration proceeding shall commence promptly under the rules then in
effect of that Association and the arbitrator agreed to by the parties or
appointed by that Association shall be an attorney other than an attorney who
has, or is associated with a firm having associated with it an attorney which
has, been retained by or performed services for the Company or Indemnitee at any
time during the five years preceding the commencement of arbitration. The award
shall be rendered in such form that judgment may be entered thereon in any court
having jurisdiction thereof. The prevailing party shall be entitled to prompt
reimbursement of any costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred in connection with such legal action or
arbitration; provided that Indemnitee shall not be obligated to reimburse the
Company unless the arbitrator or court which resolves the dispute determines
that Indemnitee acted in bad faith in bringing such action or arbitration.
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9. EXCLUSIONS. Notwithstanding the scope of indemnification which may
be available to Indemnities from time to time under any Applicable Document, no
indemnification, reimbursement or payment shall be required of the Company
hereunder with respect to:
(a) Any claim or any part thereof as to which Indemnitee shall
have been adjudged by a court of competent jurisdiction from which no appeal is
or can be taken to have acted in willful misfeasance, or willful disregard of
his duties, except to the extent that such court shall determine upon
application that, despite the adjudication of liability, but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem Proper;
(b) Any claim or any part thereof arising under Section 16(b)
of the Exchange Act pursuant to which Indemnitee shall be obligated to pay any
penalty, fine, settlement or judgment;
(c) Any obligation of Indemnitee based upon or attributable to
the Indemnitee gaining in fact any personal gain, profit or advantage to which
he was not entitled; or
(d) Any Proceeding initiated by Indemnitee without the consent
or authorization of the Board of Directors of the Company, provided that this
exclusion shall not apply with respect to any claims brought to Indemnitee to
enforce his rights under this Agreement or in any Proceeding initiated by
another person or entity whether or not such claims were brought by Indemnitee
against a person or entity who was otherwise a party to such Proceeding.
Nothing in this Section 9 shall eliminate or diminish Company's
obligations to advance that portion of Indemnitee's Expenses which represent
attorneys' fees and other costs incurred in defending any proceeding pursuant to
Section 3 of this Agreement.
10. EXTRAORDINARY TRANSACTIONS. The Company covenants and agrees that
in the event of any merger, consolidation or reorganization in which the Company
is not the surviving entity, any sale of all or substantially all of the assets
of the Company or any liquidation of the Company (each such event is hereinafter
referred to as an "extraordinary transaction"), the Company shall:
(a) Have the obligations of the Company under this Agreement
expressly assumed by the survivor, purchaser or successor, as the case may be,
in such extraordinary transaction; or
(b) Otherwise adequately provide for the satisfaction of the
Company's obligations under this Agreement, in a manner acceptable to
Indemnitee.
11. NO PERSONAL LIABILITY. Indemnitee agrees that neither the Directors
nor any officer, employee, representative or agent of the Company shall be
personally liable for the satisfaction of the Company's obligations under this
Agreement, and Indemnitee shall look solely to the assets of the Company for
satisfaction of any claims hereunder.
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12. SEVERABILITY. If any provision, phrase or other portion of this
Agreement should be determined by any court of competent jurisdiction to be
invalid, illegal or unenforceable, in whole or in part, and such determination
should become final, such provision, phrase or other portion shall be deemed to
be severed or limited, but only to the extent required to render the remaining
provisions and portions of the Agreement enforceable, and the Agreement as thus
amended shall be enforced to give effect to the intention of the parties insofar
as that is possible.
13. SUBROGATION. In the event of any payment under this Agreement, the
Company shall be subrogated to the extent thereof to all rights to
indemnification or reimbursement against any insurer or other entity or person
vested in the Indemnitee, who shall execute all instruments and take all other
actions as shall be reasonably necessary for the Company to enforce such rights.
14. GOVERNING LAW. The parties hereto agree that this Agreement shall
be construed and enforced in accordance with and governed by the laws of the
State of Ohio.
15. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be considered to have been duly given if
delivered by hand and receipted for by the party to whom the notice, request,
demand or other communication shall have been directed, or mailed by Certified
mail, return receipt requested, with postage prepaid;
(a) If to the Company, to:
Xxxxx Industries, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
Attention: President
(b) If to Indemnitee, to:
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or to such other or further address as shall be designated from time to time by
the Indemnitee or the Company to the other.
16. TERMINATION. This Agreement may be terminated by either party upon
not less than sixty (60) days' prior written notice delivered to the other
party, but such termination shall not in any way diminish the obligations of
Company hereunder with respect to Indemnitee's activities prior to the effective
date of termination.
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17. AMENDMENTS. This Agreement and the rights and duties of Indemnitee
and the Company hereunder may not be amended, modified or terminated except by
written instrument signed and delivered by the parties hereto.
This Agreement is and shall be binding upon and shall inure to the
benefits of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement in
triplicate as of the date first above written.
Xxxxx Industries, Inc.
By:
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Its:
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Indemnitee
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