EXHIBIT 10b
INDEMNIFICATION AGREEMENT
This Agreement, made and entered into this day of , ,
("Agreement"), by and between The X.X. Xxxxxxxx Company, a Massachusetts
corporation, (the "Corporation"), and ("Indemnitee"):
WHEREAS, the By-laws, as amended of the Corporation (the "By-laws") state
that the Corporation shall, to the maximum extent permitted from time to
time under applicable law and subject to certain other limitations,
indemnify each person who serves as director or officer of the Corporation
or while serving as a director or officer is or was serving at the request
of the Corporation as a director, officer, trustee, employee or agent of
another organization or who is or was a director, officer or employee who
is or was serving at the request of the Corporation in any capacity with
respect to any employee benefit plan (each, an "Indemnified Position"),
against certain liabilities and expenses; and
WHEREAS, the Corporation has requested that Indemnitee serve in an
Indemnified Position; and
WHEREAS, Indemnitee has relied upon the indemnification provisions in the
By-laws of the Corporation as a source of protection against inordinate
risks of claims and actions against him or her arising out of his or her
service to, and activities on behalf of, the Corporation and is only
willing to continue to serve on behalf of the Corporation on the condition
that the Corporation enter into an agreement in substantially the form
hereto.
NOW, THEREFORE, in consideration of Indemnitee's continued service in an
Indemnified Position for or at the request of, the Corporation after the
date hereof, the parties hereto hereby agree as follows:
1. Indemnification of Indemnitee.
(a) The Corporation hereby agrees, to the maximum extent permitted from
time to time under applicable law, including the laws of the
Commonwealth of Massachusetts and, in the case of any Indemnitee
serving with respect to an employee benefit plan (each, a Plan"), the
Employee Retirement Income Security Act ("ERISA"), to indemnify
Indemnitee against all liabilities and expenses, including amounts
paid in satisfaction of judgments, in settlement or as fines and
penalties,and counsel fees, reasonably incurred by Indemnitee in
connection with the defense or disposition of any action, suit or
other proceeding (a "Proceeding"), whether civil, criminal,
administrative or investigative, in which Indemnitee may be involved
or with which Indemnitee may be threatened, by reason of the fact
that Indemnitee is or was or has agreed to serve in an Indemnified
Position.
(b) Notwithstanding the foregoing, no indemnification shall be provided
with respect to any matter disposed of by settlement, consent decree
or other negotiated disposition unless:
(i) such indemnification shall have been approved by the holders of the
shares of the Corporation's capital stock then entitled to vote for
directors, voting such shares as a single class, by a majority of
the votes cast on the question exclusive of any shares owned by an
interested director or officer; or
(ii) such indemnification and such settlement, decree or disposition
shall have been approved as being in the best interest of the
corporation or organization or plan or participants served, as the
case may be, after notice that it involves such indemnification,
by a majority of the Disinterested Directors (or, if applicable,
the sole Disinterested Director) then in office (whether or not
constituting a quorum); or
(iii) if no Disinterested Directors exist, a written opinion,
reasonably satisfactory to the Corporation, of independent legal
counsel selected by the Corporation shall have been furnished to
the Corporation that (A) such indemnification and such
settlement, decree or disposition are in the best interest of the
corporation or organization or plan or participants served, and
(B) if adjudicated, such indemnification would not be found to
have been prohibited by law.
(c) As used in this section, an "interested" director is one against whom
in the capacity of an Indemnified Position the Proceeding in question
or another Proceeding on the same or similar grounds is then pending
or threatened, and a "Disinterested Director" is any director who is
not an interested director. The absence of any express provision for
indemnification shall not limit any right of indemnification existing
independently of this section.
2. Additional Limitations on Indemnity. No indemnity pursuant to Section
1 hereof shall be paid by the Corporation;
(a) except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of such losses for which Indemnitee is
indemnified pursuant to any D & O Insurance or Fiduciary Insurance
purchased and maintained by the Corporation;
(b) in respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law or public policy (and, in this
respect, both the Corporation and Indemnitee have been advised that
the Securities and Exchange Commission believes that indemnification
for liabilities arising under the federal securities laws is against
public policy and is, therefore, unenforceable and that claims for
such indemnification should be submitted to appropriate courts for
adjudication);
(c) on account of any Proceeding initiated by Indemnitee unless such
Proceeding was authorized in the specific case by action of the Board
of Directors of the Corporation (the "Board");
(d) on account of any suit in which judgment is rendered against
Indemnitee for an accounting of profits made from the purchase or
sale by Indemnitee of securities of the Corporation pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934
and amendments thereto (the "Exchange Act") or similar provisions of
any federal, state or local statutory law;
(e) on account of Indemnitee's conduct which is finally adjudged to have
been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct; and
(f) on account of Indemnitee's conduct which is the subject of a
Proceeding described in Section 5(b)(ii) or (iii) hereof.
3. Continuation of Obligations. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is
serving and shall continue thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed
Proceeding, whether civil, criminal or investigative, by reason of the fact
that Indemnitee was serving in an Indemnified Position.
4. Notification and Defense of Claim. Not later than 30 days after
receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the
commencement thereof but the omission so to notify the Corporation will not
relieve the Corporation from any liability which it may have to Indemnitee
otherwise than under this Agreement. With respect to any such Proceeding 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 notice from the
Corporation to Indemnitee of its election so as 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 or her counsel in such
Proceeding 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 material
conflict of interest between the Corporation and Indemnitee in the
conduct of the defense of such action which would impair the ability
of the Corporation to adequately defend the interests of the
Corporation, or (iii) the Corporation shall not in fact have employed
counsel to assume the defense of such action, in each of which cases
the reasonable fees and expenses of Indemnitee's separate counsel
shall be at the expense of the Corporation. The Corporation shall not
be entitled to assume the defense of any Proceeding brought by 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. The Corporation shall be
permitted to settle any action except that it shall not settle any
action or claim in any manner which would impose any penalty or
limitation on Indemnitee without Indemnitee's written consent.
Neither the Corporation nor Indemnitee will unreasonably withhold its
consent to any proposed settlement.
5. Advancement and Repayment of Expenses.
(a) Expenses, including counsel fees ("Expenses"), reasonably incurred by
Indemnitee in connection with the defense or disposition of any
Proceeding shall be paid from time to time by the Corporation in
advance of the final disposition thereof upon receipt of an
undertaking by Indemnitee to repay the amounts so paid if Indemnitee
ultimately shall be adjudicated to be not entitled to indemnification
pursuant to this Agreement. Such an undertaking may be accepted
without reference to the financial ability of Indemnitee to make
repayment.
(b) Notwithstanding the foregoing, the Corporation shall not be required
to advance such expense to Indemnitee if he or she:
(i) commences any Proceeding as a plaintiff unless such advance is
specifically approved by a majority of the Board of Directors of
the Corporation;
(ii) is a party to any Proceeding brought by the Corporation which
alleges willful misappropriation of corporate assets by
Indemnitee, disclosure of confidential information in violation of
his or her fiduciary or contractual obligations to the Corporation
or any other willful and deliberate breach in bad faith of his or
her duty to the Corporation or its stockholders;
(iii) in the case of persons serving at the request of the Corporation
with respect to any employee benefit plan, is a party to any
Proceeding brought by the Corporation which alleges willful
misappropriation of the assets of such employee benefit plan by
Indemnitee, disclosure of confidential information in violation
of his or her fiduciary or contractual obligations to such
employee benefit plan or any other willful and deliberate breach
in bad faith of his or her duty to such employee benefit plan or
its participants or beneficiaries.
(c) The Corporation shall indemnify Indemnitee against any and all
Expenses and, if requested by Indemnitee, shall (within seven
business days of such request) advance such Expenses to Indemnitee,
which are incurred by Indemnitee in connection with any action
brought by Indemnitee for (i) indemnification or advance payment of
Expenses by the Corporation under this Agreement or any other
agreement or By-law of the Corporation now or hereafter in effect; or
(ii) recovery under any directors' and officers' liability insurance
policies maintained by the Corporation, regardless of whether
Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as
the case may be.
(d) Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Indemnified Position, a witness
in any Proceeding to which Indemnitee is not a party, he shall be
indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith.
6. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Corporation a written request, including therein or
therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification.
The Clerk of the Corporation shall, promptly upon receipt of such a
request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
the first sentence of Section 6(a) hereof, a determination, if
required by applicable law, with respect to Indemnitee's entitlement
thereto shall be made in the specific case:
(i) if a Change in Control (as defined in Annex A) shall have occurred,
by independent legal counsel in a written opinion to the Board, a
copy of which shall be delivered to Indemnitee;
(ii) if a Change of Control shall not have occurred, (A) by a majority
vote of the Disinterested Directors, even though less than a
quorum of the Board, or (B) if there are no such Disinterested
Directors or, if such Disinterested Directors so direct, by
independent legal counsel in a written opinion to the Board, a
copy of which shall be delivered to Indemnitee or (C) if so
directed by the Board, by the stockholders of the Corporation;
and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within seven
days after such determination.
The Corporation and the Indemnitee shall each cooperate with the
person, persons or entity making such determination with respect
to Indemnitee's entitlement to indemnification, including
providing to such person, persons or entity upon reasonable
advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is
reasonably available to Indemnitee and reasonably necessary to
such determination. Any Expenses incurred by Indemnitee in so
cooperating with the person, persons or entity making such
determination shall be borne by the Corporation (irrespective of
the determination as to Indemnitee's entitlement to
indemnification), and the Corporation hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
(c) In the event the determination of entitlement to indemnification is
to be made by independent legal counsel pursuant to Section 6(b)
hereof, the independent legal counsel shall be selected by the Board,
provided, however, if a Change of Control shall have occurred, the
independent legal counsel shall be selected by Indemnitee. For
purposes of this Agreement, "independent legal counsel" means a law
firm, or a member of a law firm, that is experienced in matters of
corporation law and would not have a conflict of interest in
representing either the Corporation or Indemnitee in an action to
determine Indemnitee's rights under this Agreement. The Corporation
agrees to pay the reasonable fees of the independent legal counsel
referred to above and to fully indemnify such counsel against any and
all expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
(d) The Corporation shall not be required to obtain the consent of the
Indemnitee to the settlement of any Proceeding which the Corporation
has undertaken to defend if the Corporation assumes full and sole
responsibility for such settlement and the settlement grants the
Indemnitee a complete and unqualified release in respect of the
potential liability. The Corporation shall not be liable for any
amount paid by the Indemnitee in settlement of any Proceeding that is
not defended by the Corporation, unless the Corporation has consented
to such settlement, which consent shall not be unreasonably withheld.
7. Enforcement.
(a) The Corporation expressly confirms and agrees that it has entered
into this Agreement and assumed the obligation imposed on the
Corporation ereby in order to induce Indemnitee to continue to serve
in an Indemnified Position, and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity.
(b) In the event Indemnitee is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is
successful in such action, the Corporation shall reimburse
Indemnitee for all Indemnitee's reasonable fees and expenses in
bringing and pursuing such action.
8. Remedies of Indemnitee. In the event that (i) a determination is made
pursuant to this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of expenses is not
timely made pursuant to this Agreement, or (iii) no determination of
entitlement to indemnification shall have been made pursuant to this
Agreement within 90 days after receipt by the Corporation of the request
for indemnification, Indemnitee shall be entitled to an adjudication by any
other court of competent jurisdiction, of his entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association.
9. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to
indemnification or the advancement of Expenses hereunder, the person
or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification or advancement of expenses
under this Agreement if Indemnitee has submitted a request for
indemnification or the advancement of expenses in accordance with
Section 5(a) of this Agreement, and the Corporation 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.
(b) If the person, persons or entity empowered or selected under Section
6 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made 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, absent a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with
the request for indemnification, or a prohibition of such
indemnification under applicable law; provided, however, that the
foregoing provisions of this Section 9(b) shall not apply if the
determination of entitlement to indemnification is to be made by the
stockholders pursuant to this Agreement and if:
(i) within 15 days after receipt by the Corporation of the request for
such determination, the Board has resolved to submit such
determination to the stockholders for their consideration at an
annual meeting thereof to be held within 75 days after such receipt
and such determination is made thereat; or
(ii) a special meeting of stockholders is called within 15 days after
such receipt for the purpose of making such determination, such
meeting is held for such purpose within 60 days after having been
so called and such determination is made thereat.
(c) For purposes of any determination of good faith, Indemnitee shall be
deemed to have acted in good faith if Indemnitee's action is based
on:
(i) the records or books of account of the Corporation or relevant
enterprise, including financial statements; or
(ii) information supplied to Indemnitee by the officers of the
Corporation or relevant enterprise in the course of their duties;
or
(iii) the advice of legal counsel for the Corporation or relevant
enterprise; or
(iv) information or records given in reports made to the Corporation or
relevant enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care
by the Corporation or relevant enterprise; or
(d) The provisions of this Section 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 in this Agreement.
10. Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required
and shall do all acts that may be necessary to secure such rights and to
enable the Corporation effectively to bring suit to enforce such rights.
11. Non-Exclusivity of Rights. The right of indemnification hereby
provided shall not be exclusive. Nothing contained herein shall affect any
other rights to indemnification to which Indemnitee may be entitled by
contract, by any entity's charter or by-laws or otherwise under law.
12. Survival of Rights. The rights conferred on Indemnitee by this
Agreement shall continue after he or she has ceased to serve in an
Indemnified Position and shall inure to the benefit of Indemnitee's heirs,
executors and administrators.
13. Severability. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any or all
of the provisions hereof shall be held to be invalid or unenforceable for
any reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof.
14. No Employment Contract. This Agreement shall not be deemed an
employment contract between the Corporation (or any of its subsidiaries)
and Indemnitee. Indemnitee specifically acknowledges that Indemnitee's
employment with the Corporation (or any of its subsidiaries), if any, is at
will, and the Indemnitee may be discharged at any time for any reason, with
or without cause, except as may be otherwise provided in any written
employment contract between Indemnitee and the Corporation (or any of its
subsidiaries), other applicable formal severance policies duly adopted by
the Board, or, with respect to service as a director or officer of the
Corporation, by the Corporation's Articles of Organization, By-laws, and
applicable law.
15. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
16. Binding Effect. This Agreement shall be binding upon Indemnitee and
upon the Corporation, its successors and assigns, and shall inure to the
benefit of Indemnitee, his or her heirs, personal representative and
assigns and to the benefit of the Corporation, its successors and assigns.
17. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed
by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first above written.
THE X.X. XXXXXXXX COMPANY
By:
Name:
Title:
INDEMNITEE:
Name:
ANNEX A
For the purposes of this Agreement, a "Change of Control" means:
a. The acquisition by any person, corporation, partnership, limited
liability company or other entity (a "Person", which term shall include a
group within the meaning of the Exchange Act) of ultimate beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly of 30% or more of either (i) the then
outstanding shares of common stock of the Corporation (the "Outstanding
Corporation Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote generally
in the election of directors (the "Outstanding Corporation Voting
Securities"); provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of Control: (i)
any such acquisition directly from the Corporation, except for acquisition
of securities upon conversion of other securities of the Corporation (ii)
any such acquisition by the Corporation, (iii) any such acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (iv) any
such acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) of this Annex
A; or
b. Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election,
by the Corporation's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
c. Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the
Corporation in one or a series of transactions (a "Business Combination"),
in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, immediately
following such Business Combination more than 50% of, respectively, the
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the Corporation resulting
from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Corporation or
all or substantially all of the Corporation's assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Corporation Common Stock and outstanding Corporation Voting
Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Corporation or such corporation resulting from such
Business Combination) ultimately beneficially owns, directly or indirectly,
30% or more of, respectively, the then outstanding shares of common stock
of the Corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of the board of
directors of the Corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
d. Approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
