Exhibit 99.4
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") is made
and entered into as of the 29th day of June 2004, by and between
Eagle Supply Group, Inc., a Delaware corporation (the
"Corporation"), and ______________________ (the "Indemnitee").
Recitals
--------
A. The Indemnitee is either a member of the board of
directors of the Corporation (the "Board of Directors") or an
officer of the Corporation, or both, and in such capacity or
capacities, or otherwise as an Agent (as defined below) of the
Corporation, is performing a valuable service for the
Corporation.
B. Highly competent persons are becoming more reluctant to
serve publicly-held corporations as directors or officers or in
other capacities unless they are provided with adequate
protection against risks of claims and actions against them
arising out of their service to, and activities on behalf of,
such corporations.
C. The Board of Directors has determined that the
difficulty in attracting and retaining such persons is
detrimental to the best interests of the Corporation's
stockholders and that the Corporation should act to assure such
persons that there will be increased certainty of such adequate
protection in the future.
D. It is reasonable, prudent, and necessary for the
Corporation to obligate itself by contract to indemnify, and to
advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue
to serve the Corporation free from undue concern that they will
not be so protected.
E. The Corporation desires the benefits of having the
Indemnitee serve as a member of the Board of Directors, as an
officer or other Agent, or in more than one of such capacities,
secure in the knowledge that any expenses, liability and losses
incurred by the Indemnitee in the Indemnitee's good faith service
to the Corporation will be borne by the Corporation or its
successors and assigns.
F. The Indemnitee is willing to serve, continue to
serve, or to undertake additional service for or on behalf of the
Corporation on the condition that the Indemnitee be so
indemnified as provided in this Agreement.
G. This Agreement is intended to supplement and enhance
the indemnification provisions under the Corporation's
certificate of incorporation ("Certificate of Incorporation") and
bylaws ("Bylaws") and any resolutions adopted pursuant to the
Certificate of Incorporation and Bylaws and shall not diminish or
abrogate any rights of the Indemnitee under the Certificate of
Incorporation or Bylaws.
Operative Terms
---------------
In consideration of the recitals above and the covenants and
agreements below, the Corporation and the Indemnitee covenant and
agree as follows:
1
1. Definitions. For purposes of this Agreement, the
capitalized terms below shall have the following meanings:
"Affiliate" shall mean any corporation, joint venture,
partnership, limited liability company, trust or other entity
which (a) controls, is controlled by, or is under common control
with, the specified corporation, joint venture, partnership,
limited liability company, trust or other entity or (b) is
controlled by or is under common control with the specified
individual. For purposes of this definition, the terms
"controls", "controlled by" and "under common control with" mean
the power, directly or indirectly, to direct or cause the
direction of the management or policies of an entity whether by
voting power, contract or otherwise.
"Agent" shall mean any person who is or was, or has
consented to serve as, a director or officer of the Corporation,
or, at the request of the Corporation, (a) an employee, agent or
other official of the Corporation, (b) a director, manager,
officer, employee, agent or other official of the Corporation or
any Subsidiary or Affiliate, or (c) a fiduciary of an employee
benefit plan of the Corporation or any Subsidiary or Affiliate.
"Board of Directors" shall be as defined in the Recitals.
------------------
"Bylaws" shall be as defined in the Recitals.
------
"Certificate of Incorporation" shall be as defined in the Recitals.
----------------------------
"Change of Control" shall mean the occurrence of any
of the following after the date of this Agreement: (i) any person
(as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the combined voting power
of the Corporation's then-outstanding voting securities, (ii)
during any period of two consecutive years, after the date of
this Agreement, those individuals (the "Continuing Directors"),
who (A) were directors of the Company on the first day of any
such period or (B) subsequently became directors of the Company
and whose initial election or initial nomination for election
subsequent to that date was approved by a majority of the
Continuing Directors then on the Board of Directors, cease to
constitute a majority of the Board of Directors, (iii) any person
(as defined above) becomes the beneficial owner (as defined in
this definition above), directly or indirectly, of Voting
Securities of the Corporation representing at least 40% of the
total voting power represented by the then-outstanding Voting
Securities, (iv) the stockholders of the Corporation approve a
sale of the Corporation or its business or a merger or
consolidation with any other corporation or entity, other than a
sale, merger or consolidation that would result in the Voting
Securities of the Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding
or by being converted into Voting Securities of the surviving
entity) at least 80% of the total voting power represented by the
Voting Securities of the Corporation or such surviving entity
outstanding immediately after such sale, merger or consolidation,
or (v) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the
sale or disposition of all or substantially all of the assets of
the Corporation.
"DGCL" shall be as defined in Section 3(a).
----
2
"Disinterested Director" shall mean a director of the
Corporation who is not an employee of the Corporation or any of
its Affiliates and who, in the event that a Proceeding has been
initiated, is not a party to a Proceeding in respect of which
indemnification is sought by the Indemnitee.
"Effective Date" shall be as defined in Section 3(a).
--------------
"Exchange Act" shall mean the Securities and Exchange
------------ Act of 1934, as amended.
"Expense Advance" shall be as defined in Section 4(c)(i).
---------------
"Expenses" shall be broadly construed and shall
include, without limitation: (i) all direct and indirect costs
actually and reasonably incurred, paid, or accrued; (ii) all
attorneys' fees, retainers, court costs, transcripts, fees of
experts, witness fees, travel expenses, food and lodging expenses
while traveling, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service, freight, or other
transportation fees and expenses; and (iii) all other
disbursements or out of pocket expenses of the type customarily
incurred in connection with prosecuting, defending, preparing to
prosecute or defend, or investigating a Proceeding; in each case
incurred in connection with either the investigation of, the
defense of, being a witness in, participating in, preparing to
prosecute or defend, settling, or appealing a Proceeding, or
establishing or enforcing a right of indemnification under this
Agreement, applicable law or otherwise. Notwithstanding any of
the foregoing, the term "Expense" shall not include any
Liabilities.
"Independent Legal Counsel" shall mean a law firm, or
a member of a law firm, selected by the Corporation and approved
by the Indemnitee (which approval shall not be unreasonably
withheld or delayed), that is experienced in matters of
corporation law and neither at the time of designation is, nor in
the two years immediately preceding such designation was,
retained to represent: (i) the Corporation or any of its
Subsidiaries or Affiliates, the Indemnitee or any of the
Indemnitee's Affiliates, or any entity of which the Indemnitee
was or is a director, manager, officer, employee, trustee or
agent, or any subsidiary of such entity, in any matter material
to any such party, or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Legal
Counsel" shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Corporation or
the Indemnitee in an action to determine the Indemnitee's right
to indemnification under this Agreement arising on or after the
date of this Agreement, regardless of when the Indemnitee's act
or failure to act occurred or is alleged to have occurred.
"Liabilities" shall mean liabilities of any type
whatsoever, including, but not limited to, judgments, damages of
any type, whether direct, indirect, incidental, consequential,
miscellaneous, exemplary or other, fines, ERISA or other excise
taxes and penalties, and amounts paid in settlement (including,
without limitation, all interest, assessments, or other charges
paid or payable in connection with or in respect of any of the
foregoing).
3
"Proceeding" shall mean any pending, threatened,
or completed action, claim, hearing, suit, arbitration,
alternative dispute resolution mechanism, inquiry, investigation,
or any other proceeding (including, without limitation, any
appeals from any of the foregoing), whether civil, criminal,
administrative, legislative, or investigative in nature, whether
formal or informal, including, without limitation, any proceeding
brought by or in the right of the Corporation or otherwise.
"Subsidiary" shall mean any corporation, joint venture,
partnership, limited liability company, trust or other entity
which is controlled by the Corporation. For purposes of this
definition, the term "controlled by" means the power, directly or
indirectly, to direct or cause the direction of the management or
policies of the applicable entity whether by voting power,
contract or otherwise.
"Voting Securities" shall mean any securities of the
Corporation that are entitled generally to vote in the election
of directors.
2. Services to the Corporation, Subsidiaries or
Affiliates. The Indemnitee agrees to serve or continue to serve
as a director or officer or, at the request of the Corporation,
other Agent for so long as the Indemnitee is duly elected or
appointed and qualified in accordance with the applicable
provisions of the Certificate of Incorporation and Bylaws, or
otherwise employed or engaged by the Corporation or any
Subsidiary or Affiliate, and until such time as the Indemnitee
tenders the Indemnitee's resignation in writing, fails to stand
for reelection, is removed as a director, officer or other Agent,
or the Indemnitee's employment with the Corporation or any
Subsidiary or Affiliate terminates, as the case may be. The
Indemnitee may from time to time also perform other services at
the request of, or for the convenience of, or otherwise
benefiting the Corporation or any Subsidiary or Affiliate. This
Agreement shall not impose any obligation on the Indemnitee, the
Corporation or any Subsidiary or Affiliate to continue the
Indemnitee's position with the Corporation or any Subsidiary or
Affiliate beyond any period otherwise applicable. Accordingly,
the Indemnitee may resign or be removed from such position at any
time and for any reason (subject to any other agreement or
contractual obligation or any obligation imposed by operation of
law), in which event the Corporation or any Subsidiary or
Affiliate, as the case may be, shall have no obligation under
this Agreement to continue the Indemnitee in any such position.
3. Basic Indemnification Agreement. Subject to the
limitations set forth herein and in Section 9 hereof:
(a) The Corporation shall indemnify the Indemnitee to
the fullest extent authorized or permitted under the Delaware
General Corporation Law ("DGCL"), other applicable law, and the
provisions of the Certificate of Incorporation and Bylaws in
effect on the date hereof or as the DGCL, other applicable law,
the Certificate of Incorporation or Bylaws may be amended from
time to time (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide
broader indemnification rights than were permitted prior to such
amendment). The right to indemnification conferred in the
Certificate of Incorporation and Bylaws shall be presumed to have
been relied upon by the Indemnitee in serving or continuing to
serve the Corporation or any Subsidiary or Affiliate as a
director, officer or other Agent and shall be enforceable as a
contract right. The Corporation shall not adopt any amendments
to its Certificate of Incorporation or Bylaws, or permit any
Subsidiary or Affiliate to adopt any amendments to its organic
4
documents, the effect of which would be to deny, diminish, or
encumber the Indemnitee's rights to indemnity pursuant to the
DGCL, any other applicable law, the Certificate of Incorporation
or Bylaws, as applied to any act or failure to act occurring in
whole or in part prior to the date upon which such amendment was
approved by the Board of Directors or the Corporation's
stockholders, as the case may be (the "Effective Date"). In the
event that the Corporation shall adopt any amendment to its
Certificate of Incorporation or Bylaws, or any Subsidiary or
Affiliate shall adopt any amendment to its organic documents, the
effect of which is to deny, diminish, or encumber the
Indemnitee's right to indemnity pursuant to the Certificate of
Incorporation, Bylaws, or such organic documents, as the case may
be, such amendment shall apply only to acts of failures to act
occurring entirely after the Effective Date thereof. The
Corporation shall give notice of any such amendment to the
Indemnitee.
(b) Without in any way diminishing the scope of the
indemnification provided by Section 3(a), and in addition to any
other rights of indemnification which the Indemnitee may have
under the Certificate of Incorporation, Bylaws, organic documents
of any Subsidiary or Affiliate, or other contract right, the
Corporation agrees to indemnify and hold the Indemnitee harmless
(whenever the Indemnitee is or was a party or witness, or is
threatened to be made a party or witness, to or in any
Proceeding, including, without limitation, any Proceeding brought
by or in the right of the Corporation or any Subsidiary or
Affiliate, by reason of the fact that the Indemnitee is or was a
director, officer or other Agent of the Corporation or any
Subsidiary or Affiliate, or by reason of anything done or not
done, or alleged to have been done or not done, by the Indemnitee
in such capacity) against all Liabilities and Expenses actually
and reasonably incurred by the Indemnitee in connection with the
investigation, defense, testimony in, settlement, or appeal of
such Proceeding. The parties hereto intend that this Agreement
shall provide for indemnification in excess of that expressly
permitted by statute in the absence of an indemnity agreement.
(c) In addition to, and not as a limitation of, the
indemnification provided by Section 3(a) and (b), the rights of
indemnification under this Agreement shall include those rights
set forth in Sections 4, 5, and 7 of this Agreement.
(d) The Corporation's obligations under this Agreement
are not subject to diminution by set-off, counterclaim,
abatement, or otherwise. However, the Indemnitee will not be
released from any liability or obligations owed to the
Corporation, whether under this Agreement or otherwise.
4. Payment of Liabilities and Expenses; and Expense
Advances.
(a) Full Indemnification. Notwithstanding any other
provision in this Agreement, to the extent that the Indemnitee
has been successful on the merits or otherwise in defense of any
Proceeding, the Indemnitee shall be indemnified against all
Liabilities and Expenses actually and reasonably incurred by the
Indemnitee in connection therewith. For purposes of this Section
4, the termination of any claim, issue, or matter in any such
Proceeding by dismissal, settlement, or withdrawal, with or
without prejudice, shall be deemed to be a successful resolution
as to such claim, issue, or matter.
(b) Partial Indemnification. Notwithstanding any
other provision in this Agreement, if the Indemnitee is not
wholly successful in any Proceeding but is successful on the
merits or otherwise in defense of such Proceeding as to one or
more, but less than all, of the claims, issues, or matters in
such Proceedings, the Corporation shall indemnify the Indemnitee
5
against all Liabilities and Expenses actually and reasonably
incurred by the Indemnitee in connection with each successfully
resolved claim, issue, or matter.
(c) Advance of Expenses.
(i) All Expenses incurred by or on behalf of the
Indemnitee shall be advanced by the Corporation to the Indemnitee
("Expense Advance") within 20 days after the receipt by the
Corporation of a written request for such advance which may be
made from time to time, whether prior to or after final
disposition of a Proceeding (unless there has been a final
determination by a court of competent jurisdiction or decision of
an arbitrator that the Indemnitee is not entitled to be
indemnified for such Expenses). Any Expense Advance requested
hereby shall be made without regard to the Indemnitee's ability
to repay the amount of the Expense Advance and without regard to
the Indemnitee's ultimate entitlement to indemnification under
this Agreement. The Indemnitee's entitlement to an Expense
Advance shall include those Expenses incurred in connection with
any Proceeding by the Indemnitee seeking a determination, an
adjudication or an award in arbitration pursuant to this
Agreement. Each written request shall reasonably evidence the
Expenses incurred by the Indemnitee in connection therewith. The
Indemnitee hereby promises to repay to the Corporation the
amounts advanced if it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified pursuant to the
terms of this Agreement.
(ii) If the Indemnitee has commenced legal
proceedings in a court of competent jurisdiction to secure a
determination that the Indemnitee is entitled to be indemnified
under this Agreement, as provided in Section 7, any determination
made under Section 5 hereof that the Indemnitee is not entitled
to be indemnified under this Agreement shall not be binding and
the Indemnitee shall not be required to reimburse the Corporation
for any Expense Advance unless and until a final judicial
determination (as to which all rights of appeal therefrom have
been exhausted or have lapsed) is made that the Indemnitee is not
permitted to be indemnified under this Agreement. The
Indemnitee's obligation to reimburse the Corporation for any
Expense Advance shall be unsecured and no interest shall be
charged thereon.
5. Procedure for Determination of Entitlement to Indemnification.
(a) Whenever the Indemnitee believes that the
Indemnitee is entitled to indemnification under this Agreement,
the Indemnitee shall submit a written request to the Corporation
for indemnification to the attention of the corporate secretary.
The request for indemnification shall include documentation or
information which is necessary for the determination of
entitlement to indemnification and which is in the possession of
or reasonably available to the Indemnitee. In any event, the
Indemnitee shall submit the Indemnitee's claim for
indemnification within a reasonable time, not to exceed six
months after any judgment, order, settlement, dismissal,
arbitration award, conviction, acceptance of a plea of nolo
contendere or its equivalent, or final termination, whichever is
the later date, for which the Indemnitee requests
indemnification. The secretary of the Corporation shall,
promptly upon receipt of such a request for indemnification,
advise the Board of Directors that the Indemnitee has requested
indemnification.
(b) Upon written request for indemnification made
pursuant to Section 5(a) of this Agreement, a determination shall
be made by the Corporation with respect to the Indemnitee's
entitlement thereto under the DGCL or other applicable law as
follows:
6
(i) If a Change of Control shall not have
occurred prior to such determination, the Corporation, at its
sole discretion, shall require such determination to be made by
any one of the following:
(A) the Board of Directors by a majority
vote of Disinterested Directors, whether or not such
majority constitutes a quorum of the Board of
Directors;
(B) a committee of the Board of Directors
consisting solely of Disinterested Directors designated
to serve on such committee by a majority vote of
Disinterested Directors, whether or not such majority
constitutes a quorum of the Board of Directors; or
(C) Independent Legal Counsel, if there are
no Disinterested Directors or the Disinterested
Directors so direct.
(ii) If a Change of Control shall have occurred
prior to such determination, such determination shall be made by
the Independent Legal Counsel unless the Indemnitee shall request
that the determination be made by the Board of Directors or the
board of directors of the surviving corporation (in the event the
Corporation is not the surviving corporation as a result of such
Change of Control).
(c) The determination under Section 5(b) of the
Indemnitee's entitlement to indemnification shall be made no
later than forty (40) days after receipt of the written request
provided pursuant to Section 5(a) hereof. If it is determined
that the Indemnitee is entitled to indemnification, payment to
the Indemnitee shall be made within twenty (20) days after such
determination. The Indemnitee shall cooperate reasonably with
the person or persons making such determination with respect to
the Indemnitee's entitlement to indemnification, including,
without limitation, providing to such person or persons upon
reasonable advance request any documentation or information that
is not privileged or otherwise protected from disclosure and
which is reasonably available to the Indemnitee and reasonably
necessary to such determination. Any Expenses (including,
without limitation, attorneys' fees and disbursements) incurred
by the Indemnitee in so cooperating shall be borne by the
Corporation (irrespective of the determination as to the
Indemnitee's entitlement to indemnification), and the Corporation
hereby indemnifies and agrees to hold the Indemnitee harmless
therefrom.
(d) If the determination of entitlement to
indemnification is to be made by Independent Legal Counsel
pursuant to Section 5(b) of this Agreement, the Independent Legal
Counsel shall be selected as provided in this Section 5(d)
hereof. If a Change of Control shall not have occurred, the
Independent Legal Counsel shall be selected by the Board of
Directors, and the Corporation shall give written notice to the
Indemnitee advising the Indemnitee of the identity of the
Independent Legal Counsel so selected. If a Change of Control
shall have occurred, the Independent Legal Counsel shall be
selected by the Indemnitee (unless the Indemnitee shall request
that such selection be made by the Board of Directors, in which
event the preceding sentence shall apply), and the Indemnitee
shall give notice to the Corporation advising it of the identity
of the Independent Legal Counsel so selected. In either event,
the Indemnitee or the Corporation, as the case may be, may within
fourteen (14) days after such notice of selection shall have been
given, give notice to the Corporation or to the Indemnitee, as
the case may be, of objection to such selection. Such objection
may be asserted only on the ground that the Independent Legal
7
Counsel so selected does not meet the requirements of the
definition of Independent Legal Counsel in Section 1 of this
Agreement, and the objection shall set forth with particularity
the factual basis of such assertion. If such objection is so
made, the Independent Legal Counsel selected may not serve as
Independent Legal Counsel unless and until a court has determined
that such objection is without merit. If, within twenty (20)
days after submission by the Indemnitee of a written request for
indemnification pursuant to Section 5(a) of this Agreement, no
Independent Legal Counsel shall have been selected, or shall have
been objected to, in accordance with this Section 5(d), either
the Corporation or the Indemnitee may petition a court, under the
terms of Section 18(h) of this Agreement, for resolution of any
objection that shall have been made by the Corporation or the
Indemnitee to the other's selection of Independent Legal Counsel
or for the appointment by the court of Independent Legal Counsel,
and the person with respect to whom an objection is favorably
resolved or the person so appointed by the court shall act as
Independent Legal Counsel under Section 5(b) of this Agreement.
The Corporation shall pay any and all reasonable fees and
expenses of Independent Legal Counsel incurred by such
Independent Legal Counsel in connection with acting pursuant to
Section 5(b) of this Agreement, and the Corporation shall pay all
reasonable fees and expenses incident to the procedures of this
Section 5(d), regardless of the manner in which such Independent
Legal Counsel was selected or appointed. Upon the due
commencement of any judicial proceeding or arbitration pursuant
to Section 7 of this Agreement, the Independent Legal Counsel
shall be discharged and relieved of any further responsibility in
such capacity (subject to the applicable standards of
professional conduct then prevailing).
6. Presumptions and Effect of Certain Proceedings.
(a) To the maximum extent permitted by the DGCL and
other applicable law, in making a determination with respect to
entitlement to indemnification or an Expense Advance hereunder,
the person, persons, or entity making such determination shall
presume that the Indemnitee is entitled to indemnification or an
Expense Advance under this Agreement if the Indemnitee has
submitted a request for indemnification in accordance with
Section 5(a) of this Agreement or a request for Expense Advance
under Section 4(c) hereof, and the Corporation shall have the
burden of proof to overcome that presumption in connection with
the making by any person or persons of any determination contrary
to that presumption.
(b) If the person or persons empowered or selected
under Section 5 of this Agreement to determine whether the
Indemnitee is entitled to indemnification shall have failed to
make the requested determination within forty (40) days after the
receipt by the Corporation of the request therefor, the
determination of entitlement to indemnification shall be deemed
to have been made, and, except as otherwise provided in Section
7(c), the Indemnitee shall be deemed to be absolutely entitled to
such indemnification.
(c) The termination of any Proceeding or of any claim,
issue, or matter therein by judgment, order, settlement,
arbitration award, or conviction, or upon a plea of nolo
contendre or its equivalent, shall not of itself (i) adversely
affect the rights of the Indemnitee to indemnification or (ii)
create a presumption that the Indemnitee did not meet any
particular standard of conduct or have any particular belief
relevant to determining the Indemnitee's rights to
indemnification hereunder.
7. Remedies of the Indemnitee.
(a) In the event that: (i) a determination is made
pursuant to Section 5 of this Agreement that the Indemnitee is
not entitled to indemnification under this Agreement; (ii) an
8
Expense Advance is not timely made when and as required under
this Agreement; (iii) payment has not been timely made following
a determination that the Indemnitee is entitled to
indemnification or such determination is deemed to have been made
pursuant to Section 6(b) of this Agreement; or (iv) the
Indemnitee otherwise seeks enforcement of this Agreement, then in
each such case the Indemnitee shall be entitled to a final
adjudication in a court, under the terms of Section 18(h) of this
Agreement, of the Indemnitee's entitlement to such
indemnification or Expense Advance. Alternatively, unless court
approval is required by law for the indemnification or Expense
Advance sought by the Indemnitee, the Indemnitee at the
Indemnitee's 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 now in
effect, which award is to be made within 120 days following the
filing of the demand for arbitration. Except as set forth
herein, the provisions of Delaware law shall apply to any such
arbitration. The Corporation shall not oppose the Indemnitee's
right to seek any such adjudication or arbitration award. In any
such proceeding or arbitration, the Indemnitee shall be presumed
to be entitled to indemnification and Expense Advance, and the
Corporation shall have the burden of proof to overcome that
presumption.
(b) In the event that a determination shall have been
made pursuant to Section 5 of this Agreement that the Indemnitee
is not entitled to indemnification, in whole or in part, any
judicial proceeding or arbitration commenced pursuant to this
Section 7 shall be conducted in all respects as a de novo trial
or arbitration on the merits, and the Indemnitee shall not be
prejudiced by reason of a determination under Section 5 of this
Agreement that the Indemnitee is not entitled to indemnification.
(c) If a determination shall have been made under
Section 5 or deemed to have been made pursuant to Section 6(b) of
this Agreement that the Indemnitee is entitled to
indemnification, the Corporation shall be bound by such
determination absent (i) a misstatement by the Indemnitee of a
material fact, or an omission by the Indemnitee of a material
fact necessary to make the Indemnitee's statement not materially
misleading, in connection with the request for indemnification,
or (ii) a specific finding in a final judicial determination (as
to which all rights of appeal therefrom have been exhausted or
have lapsed) that all or any part of such indemnification is
expressly prohibited by law or this Agreement.
(d) The Corporation shall be precluded from asserting
in any judicial proceeding or arbitration commenced pursuant to
this Section 7 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that
the Corporation is bound by all the provisions of this Agreement
and is precluded from making any assertion to the contrary.
8. Indemnification for Expenses Incurred in Enforcing
Rights. The Corporation shall indemnify the Indemnitee against
any and all Expenses, and if requested by the Indemnitee, shall
make an Expense Advance to the Indemnitee pursuant to the
procedures set forth in Section 4(c)(i) hereof that are incurred
by the Indemnitee in connection with any claim asserted against
or action brought by the Indemnitee for:
(a) enforcement of this Agreement;
(b) indemnification of Liabilities and Expenses, or an
Expense Advance, by the Corporation under this Agreement, any
other written agreement between the Corporation and the
9
Indemnitee or under the DGCL or other applicable law or the
Certificate of Incorporation or Bylaws now or hereafter in effect
relating to the indemnification of the Indemnitee; or
(c) recovery under any directors' and officers'
liability insurance policies maintained by the Corporation.
9. Limitations on Indemnification. No indemnification
pursuant to Section 3 shall be paid by the Corporation nor shall
an Expense Advance be made pursuant to Section 4(c)(i):
(a) Insurance. To the extent that the Indemnitee has
received reimbursement pursuant to such liability insurance as
may exist for the Indemnitee's benefit. Notwithstanding the
availability of such insurance, the Indemnitee also may claim
indemnification from the Corporation pursuant to this Agreement
by assigning to the Corporation any claims under such insurance
to the extent the Indemnitee is paid by the Corporation. The
Indemnitee shall reimburse the Corporation for any sums the
Indemnitee receives as indemnification from other sources to the
extent of any amount paid to the Indemnitee for that purpose by
the Corporation.
(b) Section 16(b). On account and to the extent of
any wholly or partially successful claim against the Indemnitee
for an accounting of profits made in connection with the purchase
or sale by the Indemnitee of securities of the Corporation in
violation of the provisions of Section 16(b) of the Exchange Act
or similar provisions of any other applicable law;
(c) Section 304 or Similar Forfeiture. On account and
to the extent of any wholly or partially successful claim against
the Indemnitee that such amounts include amounts paid in bonus or
other incentive-based or equity-based compensation, or profits
from the sale of securities, as to which the Indemnitee is
required to reimburse to the Corporation under Section 304 of The
Xxxxxxxx-Xxxxx Act of 2002 or other applicable law;
(d) Unauthorized Settlements. Provided there has been
no Change in Control, for Liabilities in connection with
Proceedings settled without the Corporation's consent, which
consent, however, shall not be unreasonably withheld or delayed;
(e) Unlawful Indemnification. To the extent it would
be otherwise prohibited by law, if so established by a final
judgment or other final adjudication (as to which all rights of
appeal therefrom have been exhausted or have lapsed) adverse to
the Indemnitee; or
(f) Indemnitee's Proceedings. In connection with any
Proceeding which is initiated or maintained by or on behalf of
the Indemnitee against the Corporation or its directors,
officers, employees or other Agents, unless (i) such
indemnification is expressly required to be made under the DGCL,
(ii) the Proceeding was authorized by a majority of the
Disinterested Directors, (iii) there has been a Change of
Control, (iv) such indemnification is provided by the
Corporation, in its sole discretion, pursuant to the powers
vested in the Corporation under the DGCL, (v) such
indemnification is provided under a written employment agreement
between the Corporation and the Indemnitee, (vi) such
indemnification is provided under the Certificate of
Incorporation or Bylaws, or (vii) such Proceeding is initiated or
maintained to enforce the Indemnitee's rights or the
Corporation's obligations under this Agreement.
10. Non-Exclusivity. The rights of the Indemnitee under
this Agreement shall not be deemed exclusive of any other rights
to which the Indemnitee may have now or in the future under
10
applicable law, the Certificate of Incorporation, the Bylaws,
other written agreements between the Corporation or any
Subsidiary or Affiliate and the Indemnitee, vote of the
Disinterested Directors, insurance or other financial
arrangements, or otherwise. To the extent that a change in
applicable law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded
currently under the Certificate of Incorporation, the Bylaws,
this Agreement or any other written agreement between the
Corporation or any Subsidiary or Affiliate and the Indemnitee, it
is the intent of the parties that the Indemnitee enjoy the
greater benefits so afforded by such change.
11. Maintenance of Insurance. The Corporation represents
that it presently has in place certain directors' and officers'
liability insurance policies covering its directors and officers.
Subject only to the provisions of this Section 11, the
Corporation agrees that so long as the Indemnitee shall have
consented to serve or shall continue to serve as a director,
officer or other Agent of the Corporation or any Subsidiary or
Affiliate, and at all times thereafter so long as the Indemnitee
shall be subject to any possible Proceeding, the Corporation will
use all reasonable efforts to maintain in effect for the benefit
of the Indemnitee one or more valid, binding and enforceable
policies of directors' and officers' liability insurance from
established and reputable insurers, providing, in all respects,
coverage both in scope and amount which is no less favorable than
that provided by such policies that are in existence on the date
of this Agreement. Notwithstanding the foregoing, the
Corporation shall not be required to maintain such policies of
directors' and officers' liability insurance during any period if
during such period such insurance is not reasonably available or
if it is determined in good faith by the then directors of the
Corporation either that:
(a) the premium cost of maintaining such insurance is
substantially disproportionate to the amount of coverage provided
thereunder; or
(b) the protection provided by such insurance is so
limited by exclusion, deductions or otherwise that there is
insufficient benefit to warrant the cost of maintaining such
insurance.
12. Notice by Indemnitee and Defense of Claims. The
Indemnitee agrees promptly to give notice to the Corporation upon
being notified of any matter which may be subject to
indemnification hereunder or upon being served with any summons,
citation, subpoena, complaint, indictment, information or other
document relating to any matter which may be subject to
indemnification hereunder, whether civil, criminal, arbitrative,
administrative or investigative; but the omission so to notify
the Corporation will not relieve the Corporation from any
liability which it may have to the Indemnitee if such omission
does not actually prejudice the Corporation's rights and, if such
omission prejudices the Corporation's rights, it will relieve the
Corporation from liability only to the extent of such prejudice
and will not relieve the Corporation from any liability which it
may have to the Indemnitee otherwise than under this Agreement.
With respect to any Proceeding:
(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 will be entitled to assume the
defense thereof, with counsel reasonably satisfactory to the
Indemnitee; provided, however, that the Corporation shall not be
entitled to assume the defense of any Proceeding if there has
been a Change in Control. After notice from the Corporation to
the Indemnitee of its election so to assume the defense thereof
and the assumption of such defense, the Corporation will not be
liable to the Indemnitee under this Agreement for any Expenses
11
subsequently incurred by the Indemnitee in connection with the
Indemnitee's defense except as otherwise provided below. The
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 and the assumption of such defense shall be
at the expense of the Indemnitee unless (i) the employment of
counsel by the Indemnitee has been authorized by the Corporation,
(ii) the Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Corporation and the
Indemnitee in the conduct of the defense of such action or that
the Corporation's counsel may not be adequately representing the
Indemnitee, or (iii) the Corporation shall not in fact have
employed counsel within 30 calendar days from receipt of such
notice to assume the defense of such action and shall not have
continued, thereafter, to provide a defense, and in each of the
cases described in clauses (i), (ii) and (iii), the fees and
expenses of the Indemnitee's counsel shall be at the expense of
the Corporation; and
(c) The Corporation shall not be liable to indemnify
the Indemnitee under this Agreement for any amounts paid in
settlement of any action or claim effected without the
Corporation's written consent. The Corporation shall not settle
any action or claim in any manner which would impose any
liability, obligation, limitation or penalty on the Indemnitee
without the Indemnitee's prior written consent. Neither the
Corporation nor the Indemnitee will unreasonably withhold or
delay its, his or her consent to any proposed settlement;
provided, however, that the Indemnitee may withhold the
Indemnitee's consent if such settlement would impose any
financial obligation on the Indemnitee or restrict the
Indemnitee's business or professional activities.
13. Contribution. To the fullest extent permissible under
applicable law, if the indemnification provided for in this
Agreement is unavailable to the Indemnitee for any reason
whatsoever, the Corporation, in lieu of indemnifying the
Indemnitee, shall contribute to the amount incurred by the
Indemnitee for Liabilities and Expenses in connection with any
claim relating to an indemnifiable matter under this Agreement in
such proportion as is deemed fair and reasonable in light of all
of the circumstances of such Proceeding in order to reflect (a)
the relative benefits received by the Corporation and the
Indemnitee as a result of the event or transaction giving rise to
such Proceeding and (b) the relative fault of the Corporation
(and its directors, officers, employees and agents) and the
Indemnitee in connection with such event or transaction.
14. Claims against the Indemnitee. No legal action shall
be brought and no cause of action shall be asserted by or on
behalf of the Corporation or any Subsidiary or Affiliate against
the Indemnitee, the Indemnitee's spouse, heirs, executors, or
personal or legal representatives unless notice of such claim is
given to Indemnitee within one year after the date of accrual of
such cause of action, or such longer period as may be required by
applicable law under the circumstances.
15. 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 the Indemnitee related to,
but only to the extent of, such payment. The Indemnitee shall,
without cost or expense to the Indemnitee, cooperate as may be
reasonably requested by the Corporation in order for the
Corporation to be able to secure such rights of subrogation,
including, without limitation, the execution of relevant
documents by the Indemnitee.
16. Duration and Scope of Agreement; Binding Effect. This
Agreement shall continue so long as the Indemnitee shall be
subject to any possible Proceeding subject to indemnification by
reason of the fact that the Indemnitee is or was a director,
officer or other Agent of the Corporation or any Subsidiary or
Affiliate, and shall be applicable to Proceedings commenced or
12
continued before or after execution of this Agreement, whether
arising from acts or omissions occurring before or after such
execution. This Agreement shall be binding upon the Corporation,
its Subsidiaries and the Corporation's successors and assigns
(including, without limitation, any direct or indirect successor
as a result of a purchase, merger, consolidation or otherwise to
all or substantially all of the business or assets of the
Corporation) and shall inure to the benefit of the Indemnitee and
his or her spouse, assigns, heirs, devisees, executors,
administrators and other legal representatives. The Corporation
shall require and cause any successor (whether direct or
indirect, and whether by purchase, merger, consolidation or
otherwise), to all or substantially all of the Corporation's
business or assets, expressly to assume in writing and agree to
perform this Agreement in the same manner and to the same extent
that the Corporation would have been required to perform if no
such transaction or succession had taken place.
17. General Provisions.
(a) Severability. If any provision or provisions of
this Agreement shall be held to be invalid, illegal, or
unenforceable for any reason whatsoever: (i) the validity,
legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable that is not itself invalid,
illegal or unenforceable) shall not in any way be adversely
affected or impaired thereby; and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or
unenforceable that is not itself invalid, illegal, or
unenforceable) shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or
unenforceable.
(b) Captions. The captions in this Agreement are
inserted for convenience of reference only and shall not be
deemed to constitute part of this Agreement or to affect the
interpretation thereof.
(c) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to
constitute an original, but all of which together shall
constitute one and the same instrument.
(d) Interpretation. The parties intend this Agreement
to be interpreted and enforced so as to provide indemnification
to the Indemnitee to the fullest extent now or hereafter
permitted by the DGCL and other applicable law.
(e) Modification and Waiver. No supplement,
modification, or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a
continuing waiver. No waiver of any provision of this Agreement
shall be effective unless executed in writing.
(f) Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given (i) if delivered by hand and
receipted for by the party to whom said notice or other
communication shall have been directed, at the time of delivery,
(ii) if mailed by certified mail (return receipt requested) with
postage prepaid, on the fourth business day after the date on
which it is so mailed, or (iii) if delivered by a nationally
recognized overnight courier service, one business day after
being deposited with such courier, and addressed: (A) if to the
13
Corporation, to 000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX
00000, Attention: Chief Executive Officer, or (B) if to the
Indemnitee, to the address listed on the signature page below, or
(C) to such other address as either party has specified by notice
given in accordance with this Subsection.
(g) Governing Law. This Agreement shall be governed
by, and construed and enforced in accordance with, (i) the DGCL
and (ii) the other laws of the State of Delaware applicable to
contracts made and to be performed wholly in such state without
giving effect to the principles of conflicts of laws that would
result in the application of the laws of any other jurisdiction.
(h) Jurisdiction and Venue. Except as provided in the
next sentence of this Section, the Corporation and the Indemnitee
agree that (i) the courts in the State of New York and State of
Delaware shall have exclusive jurisdiction as to any action or
Proceeding which arises out of or relates to this Agreement and
(ii) any action instituted under this Agreement shall be brought
only in the courts of the State of New York, located in
Manhattan, or the State of Delaware, or, if it has or can acquire
jurisdiction, the federal district court for the Southern
District of New York or the District of Delaware, and each of the
parties waives any right that it may have to object to such venue
for lack of convenience or otherwise. If required by the DGCL,
the Court of Chancery of the State of Delaware shall be the
exclusive jurisdiction and venue to hear and determine all
actions for indemnification or an Expense Advance.
(i) Waiver of Jury Trial. THE PARTIES TO THIS
AGREEMENT EXPRESSLY WAIVE TRIAL BY JURY IN ANY PROCEEDINGS UNDER
OR IN CONNECTION WITH THIS AGREEMENT.
[Signature Page Follows]
14
The parties have executed this Agreement on the day and year
stated in the opening paragraph of this Agreement.
Corporation:
Eagle Supply Group, Inc.
By:/S/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
--------------------
Title: Chief Executive Officer
-----------------------
Indemnitee:
/S/
--------------------------------
(Signature)
--------------------------------
(Printed Name)
Address:
------------------------
------------------------
------------------------
Date:
---------------------------
15
