EXHIBIT 10.80
INDEMNITY AGREEMENT
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THIS AGREEMENT, made and entered into on and as of this 25th day of
October, 1996, (the "Agreement"), is by and between Xxxxx & Xxxxxx
Manufacturing Company, a Delaware corporation, (the "Company," which term
shall include any one or more of its subsidiaries where appropriate), and
Xxxx Xxxxxx Xxxx (the "Indemnitee"):
RECITALS
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or in other capacities unless they
are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the
corporation; and,
WHEREAS, the current impracticability of obtaining adequate insurance
and the uncertainties relating to indemnification have increased the
difficulty of attracting and retaining such persons; and,
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that the difficulty in attracting and retaining such persons is
detrimental to the best interests of the Company's shareholders and that
the Company should act to assure such persons that there will be increased
certainty of such protection in the future; and,
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest
extent permitted by applicable law so that they will serve or continue to
serve the Company free from undue concern that they will not be so
indemnified; and,
WHEREAS, Indemnitee is willing to serve, continue to serve and/or to
take on additional service for or on behalf of the Company on the condition
that he be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree
as follows:
1. Services by Indemnitee. Indemnitee agrees to serve or continue to
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serve as a director of the Company. This Agreement shall not impose any
obligation on the Indemnitee or the Company to continue the Indemnitee's
position with the Company beyond any period otherwise applicable.
2. General. The Company shall indemnify and shall advance Expenses
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(as hereinafter defined) to Indemnitee as provided in this Agreement and
to the fullest extent permitted by law.
3. Proceedings Other Than Proceedings by or in the Right of the
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Company. Indemnitee shall be entitled to the rights of indemnification
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provided in this Section 3 if, by reason of his Corporate Status, (as
hereinafter defined), he is, or is threatened to be made, a party to any
threatened, pending, or completed Proceeding (as hereinafter defined),
other than a Proceeding by or in the right of the Company. Pursuant to
this Section 3, Indemnitee shall be indemnified against expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal Proceeding,
had no reasonable cause to believe his conduct was unlawful.
4. Proceedings by or in the Right of the Company. Indemnitee shall
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be entitled to the rights of indemnification provided in this Section 4,
if, by reason of his Corporate Status, he is, or is threatened to be made,
a party to any threatened, pending or completed Proceeding brought by or in
the right of the Company to procure a judgment in its favor. Pursuant to
this Section, Indemnitee shall be indemnified against Expenses actually and
reasonably incurred by him or on his behalf in connection with such
Proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company.
Notwithstanding the foregoing, no indemnification against such Expenses
shall be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company if such
indemnification is not permitted by Delaware law; provided, however, that
indemnification against Expenses shall nevertheless be made by the Company
in such event to the extent that the Court of Chancery of the State of
Delaware, or the court in which such Proceeding shall have been brought or
is pending, shall determine.
5. Indemnification for Expenses of a Party who is Wholly or Partly
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Successful. Notwithstanding any other provision of this Agreement, to the
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extent that Indemnitee is, by reason of his Corporate Status, a party to
and is successful, on the merits or otherwise, in any Proceeding, he shall
be indemnified against all Expenses actually and reasonably incurred by him
or on his behalf in connection therewith. If Indemnitee is not wholly suc-
cessful in such Proceeding but is successful, on the merits or otherwise,
as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him or on his behalf in connection with
each successfully resolved claim, issue or matter. For purposes of this
Section and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal or withdrawal, with or without
prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.
6. Advance of Expenses. The Company shall advance all reasonable
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Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding within twenty days after the receipt by the Company of a
statement or statements from Indemnitee requesting such advance or advances
from time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses.
7. Procedure for Determination of Entitlement to Indemnification.
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(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company 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 Secretary of the
Company shall, promptly upon receipt of such a request for indemnification,
advise the Board of Directors in writing that Indemnitee has requested
indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant
to Section 7(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 hereinafter defined) shall
have occurred, by Independent Counsel (as hereinafter defined) in a written
opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee (unless Indemnitee shall request that such determination be
made by the Board of Directors or the shareholders, in which case the
determination shall be made in the manner provided below in clauses (ii) or
(iii); (ii) if a Change of Control shall not have occurred, (A) by the
Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors (as hereinafter defined), or (B) if a quorum of the
Board of Directors consisting of Disinterested Directors is not obtainable
or, even if obtainable, such quorum of Disinterested Directors so directs,
by Independent Counsel in a written opinion to the Board of Directors, a
copy of which shall be delivered to Indemnitee or (C) by the shareholders
of the Company; or (iii) as provided in Section 8(b) of this Agreement;
and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination. Indemnitee shall 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 costs of expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating shall be borne by
the Company (irrespective of the determination), and the Company 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 Counsel pursuant to Section 7(b) of this
Agreement, the Independent Counsel shall be selected as provided in this
Section 7(c). If a Change of Control shall not have occurred, the
Independent Counsel shall be selected by the Board of Directors, and the
Company shall give written notice to Indemnitee advising him of the
identity of the Independent Counsel so selected. If a Change of Control
shall have occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by
the Board of Directors, in which event the preceding sentence shall apply),
and Indemnitee shall give written notice to the Company advising it of the
identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may within 7 days after
such written notice of selection shall have been given, deliver to the
Company or to Indemnitee, as the case may be, a written objection to such
selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of
"Independent Counsel" as defined in Section 13 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. If such written objection is made, the Independent Counsel so
selected may not serve as Independent Counsel unless and until a court has
determined that such objection is without merit. If, within 20 days after
submission by Indemnitee of a written request for indemnification pursuant
to Section 7(a) hereof, no Independent Counsel shall have been selected or
if selected, shall have been objected to, in accordance with this Section
7(c), either the Company or Indemnitee may petition the Court of Chancery
of the State of Delaware or other court of competent jurisdiction for
resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by
such other person as the Court shall designate, and the person with respect
to whom an objection is favorably resolved or the person so appointed
shall act as Independent Counsel under Section 7(b) hereof. The Company
shall pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to
Section 7(b) hereof, and the Company shall pay all reasonable fees and
expenses incident to the procedures of this Section 7(c), regardless of the
manner in which such Independent Counsel was selected or appointed. Upon
the due commencement of any judicial proceeding or arbitration pursuant to
Section 9(a)(iii) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then
prevailing).
8. Presumptions and Effect of Certain Proceedings.
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(a) If a Change of Control shall have occurred in making a
determination with respect to entitlement to indemnification hereunder, the
person, persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with
Section 7(a) of this Agreement, and the Company shall have the burden of
proof to overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that
presumption.
(b) If the person, persons or entity empowered or selected under
Section 7 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made such determination within 60 days after
receipt by the Company 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 (i) 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 (ii) a prohibition of
such indemnification under applicable law; provided, however, that such 60-
day period may be extended for a reasonable time, not to exceed an
additional 30 days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of
documentation and/or information relating thereto; and provided, further,
that the foregoing provisions of this Section 8(b) shall not apply (i) if
the determination of entitlement to indemnification is to be made by
the shareholders pursuant to Section 7(b) of this Agreement and if (A)
within 15 days after receipt by the Company of the request for such
determination the Board of Directors has resolved to submit such
determination to the shareholders for their consideration at an annual
meeting thereof to be held within 75 days after such receipt and such
determination is made thereat, (B) a special meeting of shareholders 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, or (ii) if
the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 7(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or
matter therein by judgment, order, settlement or conviction, or upon a plea
of nolo contendere or its equivalent, shall not (except as otherwise
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expressly provided in this Agreement) of itself adversely affect the right
of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Company or, with respect
to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.
9. Remedies of Indemnitee.
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(a) In the event that (i) a determination is made pursuant to Section
7 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made
pursuant to Section 6 of this Agreement, (iii) the determination of
entitlement to indemnification is to be made by Independent Counsel
pursuant to Section 7(b) of this Agreement and such determination shall not
have been made and delivered in a written opinion within 90 days after
receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 of this Agreement within
ten (10) days after receipt by the Company of a written request therefor,
or (v) payment of indemnification is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification
or such determination is deemed to have been made pursuant to Section 8 of
this Agreement, Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of Delaware, or in 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 rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first
has the right to commence such proceeding pursuant to this Section 9(a).
The Company shall not oppose Indemnitee's right to seek any such
adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant
to Section 7 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant
to this Section 9 shall be conducted in all respects as a de novo trial, or
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arbitration, on the merits and Indemnitee shall not be prejudiced by reason
of that adverse determination. If a Change of Control shall have occurred
in any judicial proceeding or arbitration commenced pursuant to this
Section 9, the Company shall have the burden of proving that Indemnitee is
not entitled to indemnification or advancement of Expenses, as the case may
be.
(c) If a determination shall have been made or deemed to have been
made pursuant to Section 7 or 8 of this Agreement that Indemnitee is
entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant
to this Section 9, absent (i) 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 (ii) a prohibition of such indemnification under
applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceedings or arbitration commenced pursuant to this Section 9 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 Company is bound by all the provisions of this
Agreement.
(e) In the event that Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce his rights
under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by
the Company against, any and all expenses (of the types described in the
definition of Expenses in Section 13 of this Agreement) actually and
reasonably incurred by him in such judicial adjudication or arbitration,
but only if he prevails therein. If it shall be determined in said
judicial adjudication or arbitration that Indemnitee is entitled to receive
part but not all of the indemnification or advancement of expenses sought,
the expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be appropriately prorated.
10. Security. To the extent requested by the Indemnitee and approved
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by the Board, the Company may at any time and from time to time provide
security to the Indemnitee for the Company's obligations hereunder through
an irrevocable bank line of credit, funded trust, or other collateral. Any
such security, once provided to the Indemnitee, may not be revoked or
released without the prior written consent of Indemnitee.
11. Non-Exclusivity; Duration of Agreement, Insurance; Subrogation.
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(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under
applicable law, the Company's certificate of incorporation or by-laws, any
other agreement, a vote of shareholders or a resolution of directors, or
otherwise. This Agreement shall continue until and terminate upon the
later of: (a) 10 years after the date that Indemnitee shall have ceased to
serve as a director or officer of the Company or fiduciary of any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise on which Indemnitee served at the request of the Company;
or (b) the final termination of all pending Proceedings in respect of which
Indemnitee is granted rights of indemnification or advancement of expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section
9 of this Agreement relating thereto. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the benefit
of Indemnitee and his heirs, executors and administrators.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors and officers of the
Company or fiduciaries of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person
serves at the request of the Company, Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum
extent of the coverage available for any such director or officer under
such policy or policies.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee who shall execute all papers required and take all
action necessary to secure such rights including execution of such
documents as are necessary to enable the Company to bring suit to enforce
such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise.
12. Severability. If any provision or provisions of this Agreement
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shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) 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 affected or impaired thereby; and
(b) 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.
13. Exception to Right of Indemnification or Advancement of Expenses.
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Notwithstanding any other provision of this Agreement, Indemnitee shall
not be entitled to indemnification or advancement of Expenses under this
Agreement with respect to any Proceeding, or any claim therein, brought or
made by him against the Company.
14. Definitions. For purposes of this Agreement:
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(a) "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of
1934 (the "Act"), whether or not the Company is then subject to such
reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities without
the prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining such
percentage interest; (ii) the Company is a party to a merger,
consolidation, sale of assets or other reorganization, or a proxy contest,
as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (iii) during any period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose any new
director whose election or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the Board of
Directors.
(b) "Corporate Status" describes the status of a person who is or was
or has agreed to become a director of the Company, or is or was an officer
or fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person
is or was serving at the request of the Company.
(c) "Disinterested Directors" means a director of the Company who is
not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend or investigating a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent:
(i) the Company or Indemnitee in any matter material to either such party,
or (ii) any other party to the Proceeding giving rise to a claim for indem-
nification hereunder. Notwithstanding the foregoing, the term "Independent
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 Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement.
(f) "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any
other proceeding, whether civil, criminal, administrative or investigative,
arising on or after the date of this Agreement (and regardless of when the
Indemnitee's act or failure to act occurred), except one initiated by an
Indemnitee pursuant to Section 9 of this Agreement to enforce his rights
under this Agreement.
15. Headings. The headings of the paragraphs of this Agreement are
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inserted for convenience only and shall not be deemed to constitute part
of this Agreement or to affect the construction thereof.
16. Modification and Waiver. This Agreement may be amended from time
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to time to reflect changes in Delaware law or for other reasons. 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.
17. Notice by Indemnitee. Indemnitee agrees promptly to notify the
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Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement
of Expenses covered hereunder, provided, however, that the failure to give
any such notice shall not disqualify the Indemnitee from indemnification
hereunder.
18. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been duly given
if (i) delivered by hand and receipted for by the party to whom said notice
or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed:
(a) If to Indemnitee, to:
Xxxx Xxxxxx Xxxx
000 Xxxx Xxxx Xxxx
Xxxxxx, XX 00000
(b) If to the Company, to:
Secretary
Xxxxx & Xxxxxx Manufacturing Company
Precision Park
000 Xxxxxxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000-0000
or to such other address as may have been furnished to Indemnitee by the
Company or to the Company by Indemnitee, as the case may be.
19. Governing Law. The parties agree that this Agreement shall be
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governed by and construed and enforced in accordance with the laws of the
State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
Attest: Xxxxx & Xxxxxx Manufacturing Company
By: /s/ Xxxxx X. Xxxxx, III By: /s/ Xxxxx X. Xxxxxx
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Secretary Xxxxx X. Xxxxxx
Chairman of the Board
President & Chief Executive Officer
Indemnitee
/s/ Xxxx Xxxxxx Xxxx
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Xxxx Xxxxxx Xxxx
