EXHIBIT 10.1
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT, dated as of ________________, 199_____,
between The PRIMA Group International, Inc., a Delaware corporation (the
"Corporation"), and ____________________________ (the "Indemnitee"),
W I T N E S S E T H:
WHEREAS, Indemnitee is a member of the board of directors of the
Corporation (the "Board of Directors") or is an officer of the Corporation, and
in such capacity is performing a valuable service for the Corporation; and
WHEREAS, the Corporation's Bylaws (the "Bylaws") provide various rights
to directors and officers of the Corporation with respect to indemnification and
advancement of expenses; and
WHEREAS, the Bylaws specifically provide that the rights provided
therein shall not be deemed exclusive of any other rights to those seeking
indemnification or the advancement of expenses under any agreement or vote of
Disinterested Directors; and
WHEREAS, in order to provide greater certainty with respect to
Indemnitee's rights of indemnification and advancement of expenses and thereby
induce Indemnitee to serve, continue to serve, and take on additional service
for or on behalf of the Corporation; and
WHEREAS, it is intended that Indemnitee shall be paid promptly by the
Corporation all amounts necessary to effectuate in full the indemnity provided
herein;
NOW, THEREFORE, in consideration of the premises and the covenants in
this Agreement, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Services by Indemnitee. Indemnitee agrees to serve as a director or
officer of the Corporation so long as he or she is duly appointed or elected and
qualified in accordance with the applicable provisions of the Bylaws of the
Corporation or any subsidiary of the Corporation and until such time as he or
she resigns or fails to stand for election or is removed from his or her
position. Indemnitee may at any time and for any reason resign or be removed
from such position (subject to any other contractual obligation or other
obligation imposed by operation of law), in which event the Corporation shall
have no obligation under this Agreement to continue Indemnitee in any such
position.
2. Indemnification.
(a) The Corporation shall indemnity Indemnitee against Expenses and
Liabilities in connection with any Proceeding arising out of acts or omissions
of Indemnitee occurring during Indemnitee's service as a director or as an
officer of the Corporation to the fullest extent permitted by applicable law or
the Bylaws of the Corporation in effect on the date hereof or as
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such law or Bylaws may from time to time be amended (but, in the case of any
such amendment, only to the extent such amendment permits the Corporation to
provide broader indemnification rights than the law or Bylaws permitted the
Corporation to provide before such amendment). The right to indemnification
provided in the Bylaws shall be presumed to have been relied upon by Indemnitee
in serving or continuing to serve the Corporation and shall be enforceable as a
contract right. Without diminishing the scope of the indemnification provided by
this Section 2, the Corporation shall indemnify Indemnitee whenever he or she is
or was a party or is threatened to be made a party to any Proceeding, including
without limitation any such Proceeding brought by or in the right of the
Corporation, because he or she is or was a director or officer of the
Corporation or because of anything done or not done by Indemnitee in such
capacity, against Expenses and Liabilities actually and reasonably incurred by
Indemnitee or on his or her behalf in connection with such Proceeding, including
the costs of any investigation, defense, settlement or appeal, except that no
indemnification shall be made with respect to any claim, issue or matter (i) if
a final adjudication establishes that his or her actions were not taken in good
faith or in a manner reasonably believed to be in or not opposed to the best
interests of the Corporation or, with respect to any criminal action or
proceeding, with no reasonable cause to believe his or her conduct was unlawful,
or (ii) if Indemnitee was finally adjudged to be liable to the Corporation by a
court of competent jurisdiction unless and to the extent that a Delaware Court
of Chancery or the court in which the action was heard determines that
Indemnitee is entitled to indemnification for such amounts as the court deems
proper. In addition to, and not as a limitation of, the foregoing, the rights of
indemnification of Indemnitee provided under this Agreement shall include those
rights set forth in Xxxxxxxx 0, 0, 0 xxx 00 xxxxx.
(x) Indemnitee shall be paid promptly by the Corporation all amounts
necessary to effectuate the foregoing indemnity.
3. Advance of Expenses. All reasonable Expenses incurred by or on
behalf of Indemnitee shall be advanced from time to time by the Corporation to
Indemnitee within thirty (30) days after the Corporation's receipt of a written
request for an advance of Expenses, whether prior to or after final disposition
of a Proceeding (except to the extent that there has been a Final Adverse
Determination that Indemnitee is not entitled to be indemnified for such
Expenses), including without limitation any Proceeding brought by or in the
right of the Corporation. The written request for an advancement of any and all
Expenses under this paragraph shall contain reasonable detail of the Expenses
incurred by Indemnitee. If required by law at the time of such advance,
Indemnitee hereby agrees to repay the amounts advanced if it is ultimately
determined that Indemnitee is not entitled to be indemnified pursuant to the
terms of this Agreement.
4. Limitations. The foregoing indemnity and advance of Expenses shall
apply only to the extent that Indemnitee has not been indemnified and reimbursed
pursuant to such insurance as the Corporation may maintain for Indemnitee's
benefit, or otherwise; provided, however, that notwithstanding the availability
of such other indemnification and reimbursement, Indemnitee may claim
indemnification and advancement of Expenses pursuant to this Agreement by
assigning to the Corporation, at its request, Indemnitee's claims under such
insurance to the extent Indemnitee has been paid by the Corporation. In
addition, the foregoing indemnity and advance of expenses shall not apply to an
accounting of profits made from the purchase and sale
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by the Indemnitee of securities of the Corporation within the meaning of Section
16(b) of the Securities Exchange Act of 1934, as amended.
5. Maintenance of Insurance and Self-Insurance.
(a) Subject only to the provisions of Section 5(b) hereof, so long as
Indemnitee shall continue to serve as a director or officer of the Corporation,
and thereafter so long as Indemnitee shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal, by
reason of the fact that Indemnitee is or was a director or officer of the
Corporation (or while such a director or officer, served as a director, officer,
employee or agent of the Corporation or as a director, officer, trustee,
partner, employee or agent of a Subsidiary, as hereafter defined, or at the
Corporation's request, served in any such position with any other corporation,
partnership, joint venture, trust or other enterprise), the Corporation shall
seek to purchase and maintain in effect for the benefit of Indemnitee one or
more valid, binding and enforceable policies of directors' and officers'
liability insurance ("D&O Insurance").
(b) The Corporation shall not be required to maintain said policy or
policies of D&O Insurance in effect if said insurance is not reasonably
available or if, in the reasonable business judgment of the Board of Directors,
either (i) the premium cost for such insurance is substantially disproportionate
to the amount of coverage, or (ii) such insurance provides insufficient benefit
by reason of the extent of applicable exclusions, the limitation of the
insurer's liability, the size of retentions, or any other similar limitations
under any such policy.
(c) In the event the Corporation does not purchase and maintain D&O
Insurance in effect, the Corporation agrees to use its best efforts to make,
establish and fund one or more independent financial arrangements, such as an
indemnification trust, letter of credit or security arrangement, that will, in
the best judgment of the Board of Directors, provide the greatest reasonable
assurance that Indemnitee is and will be held harmless and indemnified to the
full extent permitted by law.
6. Procedure for Determination of Entitlement to Indemnification.
(a) Whenever Indemnitee believes that he or she is entitled to
indemnification pursuant to this Agreement, Indemnitee shall submit a written
request for indemnification to the Corporation. Any request for indemnification
shall include sufficient documentation or information reasonably available to
Indemnitee to support his or her claim for indemnification. Indemnitee shall
submit such claim for indemnification within a reasonable time not to exceed
five years after any judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere or its equivalent, final
termination or other disposition or partial disposition of any Proceeding,
whichever is the later date for which Indemnitee requests indemnification. The
President or the Secretary or other appropriate officer shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board of
Directors in writing that Indemnitee has made such request. Determination of
Indemnitee's entitlement to indemnification shall be made not later than thirty
(30) days after the Corporation's receipt of his or her written request for such
indemnification.
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(b) The Indemnitee shall be entitled to select the forum in which
Indemnitee's request for indemnification will be heard, which selection shall be
included in the written request for indemnification required in Section 6(a).
The forum shall be any one of the following:
(i) The stockholders of the Corporation;
(ii) A quorum of the Board of Directors consisting of
Disinterested Directors;
(iii) Independent Legal Counsel, who shall made the
determination in a written opinion; or
(iv) A panel of three arbitrators, one selected by the
Corporation, another by Indemnitee and the third by the first two
arbitrators selected. If for any reason three arbitrators are not
selected within thirty (30) days after the appointment of the first
arbitrator, then selection of additional arbitrators shall be made by
the American Arbitration Association. If any arbitrator resigns or is
unable to serve in such capacity for any reason, the American
Arbitration Association shall select such arbitrator's replacement. The
arbitration shall be conducted pursuant to the commercial arbitration
rules of the American Arbitration Association now in effect.
If Indemnitee fails to make such designation, his or her claim shall be
determined by a quorum of the Board of Directors consisting of Disinterested
Directors, if available. If no such quorum is available, the designation shall
be made by an appropriate court of the State of Delaware.
7. Fees and Expenses of Independent Legal Counsel. The Corporation
agrees to pay the reasonable fees and expenses of Independent Legal Counsel or a
panel of three arbitrators should such Counsel or such panel of arbitrators be
retained to make a determination of Indemnitee's entitlement to indemnification
pursuant to Section 6 of this Agreement, and to fully indemnify such Counsel or
arbitrators against any and all expenses and losses incurred by any of them
arising out of or relating to this Agreement or their engagement pursuant
hereto.
8. Remedies of Indemnitee.
(a) In the event that (i) a determination pursuant to Section 6 hereof
is made that Indemnitee is not entitled to indemnification, (ii) advances of
Expenses are not made pursuant to this Agreement, (iii) payment has not been
timely made following a determination of entitlement to indemnification pursuant
to this Agreement, or (iv) Indemnitee otherwise seeks enforcement of this
Agreement, Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware of his or her rights. The Corporation
shall not oppose Indemnitee's right to seek any such adjudication.
(b) In the event that a determination that Indemnitee is not entitled
to indemnification, in whole or in part, has been made pursuant to Section 6
hereof, the decision in the judicial proceeding provided in paragraph (a) of
this Section 8 shall be made de novo and
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Indemnitee shall not be prejudiced by reason of a determination that he or she
is not entitled to indemnification.
(c) If a determination that Indemnitee is entitled to indemnification
has been made pursuant to Section 6 hereof or otherwise pursuant to the terms of
this Agreement, the Corporation shall be bound by such determination in the
absence of (i) a misrepresentation or omission of a material fact by Indemnitee
or (ii) a specific finding (which has become final) by an appropriate court of
the State of Delaware that all or any part of such indemnification is expressly
prohibited by law.
(d) In any court proceeding pursuant to this Section 8, the Corporation
shall be precluded from asserting that the procedures and presumptions of this
Agreement are not valid, binding and enforceable. The Corporation shall
stipulate in any such court that the Corporation is bound by all the provisions
of this Agreement and is precluded from making any assertion to the contrary.
(e) Expenses reasonably incurred by Indemnitee in connection with his
or her request for indemnification under this Agreement, seeking enforcement of
this Agreement or to recover damages for breach of this Agreement shall be borne
by the Corporation.
9. Modification, Waiver, Termination and Cancellation. No supplement,
modification, termination, cancellation 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 provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver.
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 papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Corporation effectively to
bring suit to enforce such rights.
11. Notice by Indemnitee and Defense of Claim. Indemnitee shall
promptly notify the Corporation in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any matter, whether civil, criminal, administrative or
investigative, but the omission so to notify the Corporation will not relieve it
from any liability which it may have to Indemnitee if such omission does not
prejudice the Corporation's rights. If such omission does prejudice the
Corporation's rights, the Corporation will be relieved from liability only to
the extent of such prejudice; nor will such omission relieve the Corporation
from any liability which it may have to Indemnitee otherwise than under this
Agreement. With respect to any 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; and
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(b) The Corporation jointly with any other
indemnifying party similarly notified will be entitled to assume the
defense thereof, with counsel reasonably satisfactory to Indemnitee;
provided, however, that the Corporation shall not be entitled to assume
the defense of any Proceeding if Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the
Corporation and Indemnitee with respect to such Proceeding. After
notice from the Corporation to Indemnitee of its election to assume the
defense thereof, the Corporation will not be liable to Indemnitee under
this Agreement for any 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 own 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 counsel
engaged by the Corporation cannot adequately represent Indemnitee;
(iii) The Corporation shall not in fact have employed counsel
to assume the defense in such Proceeding or shall not in fact have
assumed such defense and be acting in connection therewith with
reasonable diligence; or
(iv) Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Corporation and Indemnitee with
respect to such Proceeding;
in each of which cases the fees and expenses of such counsel shall be at the
expense of the Corporation.
(c) The Corporation shall not settle any Proceeding in any manner which
would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent; provided, however, that Indemnitee will not reasonably withhold
his or her consent to any proposed settlement.
12. Notices. All notices, requests, demands and other communications
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:
-------------------
-------------------
-------------------
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(b) If to the Corporation to:
The PRIMA Group International, Inc.
Attn: President
000 X. Xxxxxx Xxxxx Xx., Xxxxx 000
Xxxxxxxxx, XX 00000
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
13. Nonexclusivity. The rights of Indemnitee hereunder shall not be
deemed exclusive of any other rights to which Indemnitee may now or in the
future be entitled under the Delaware General Corporation Law, the Corporation's
Certificate of Incorporation or Bylaws, or any agreements, vote of stockholders,
resolution of the Board of Directors or otherwise.
14. Certain Definitions.
(a) "Disinterested Director" shall mean a director of the Corporation
who is not or was not a party to, or whose property or interests are not
affected, the Proceeding in respect of which indemnification is being sought by
Indemnitee.
(b) "Expenses" shall include all direct and indirect costs (including,
without limitation, attorneys' fees, retainers, court costs, transcripts, fees
of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, all other
disbursements or out-of-pocket expenses and reasonable compensation for time
spent by Indemnitee for which he or she is otherwise not compensated by the
Corporation) actually and reasonably incurred in connection with a Proceeding or
establishing or enforcing a right to indemnification under this Agreement,
applicable law or otherwise; provided, however, that "Expenses" shall not
include any Liabilities.
(c) "Final Adverse Determination" shall mean that a determination that
Indemnitee is not entitled to indemnification shall have been made pursuant to
Section 6 hereof and either (i) a final unappealable adjudication in a Delaware
court pursuant to Section 8(a) hereof shall have denied Indemnitee's right to
indemnification hereunder, or (ii) Indemnitee shall have failed to file a
complaint in a Delaware court pursuant to Section 8(a) for a period of one
hundred twenty (120) days after the determination made pursuant to Section 6
hereof.
(d) "Indemnification Period" shall mean the period of time during which
Indemnitee shall continue to serve as a director or as an officer of the
Corporation, and thereafter so long as Indemnitee shall be subject to any
possible Proceeding arising out of acts or omissions of Indemnitee as a director
or as an officer of the Corporation.
(e) "Independent Legal Counsel" shall mean a law firm or a member of a
law firm selected by the Corporation and approved by Indemnitee (which approval
shall not be unreasonably withheld) and that neither is presently nor in the
past five (5) years has been
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retained to represent: (i) the Corporation, in any material matter, 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 Indemnitee in an action to determine Indemnitee's
right to indemnification under this Agreement.
(f) "Liabilities" shall mean liabilities of any type whatsoever
including, but not limited to, any judgments, fines, ERISA excise taxes and
penalties, penalties and amounts paid in settlement (including all interest
assessments and other charges paid or payable in connection with or in respect
of such judgments, fines, penalties or amounts paid in settlement) of any
proceeding.
(g) "Proceeding" shall mean any threatened, pending or completed
action, claim, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative, including any appeal therefrom.
(h) "Subsidiary" shall mean any corporation, joint venture, trust,
partnership, unincorporated business association or other enterprise of which
more than 50% of the outstanding capital stock having voting power to elect a
majority of the board of directors or similar body of such enterprise is owned
by the Corporation (irrespective of whether or not, at the time capital stock of
any other class or series of such enterprise shall or might have voting power
upon the occurrence of any contingency) or which the Corporation otherwise
controls or a non-profit corporation which receives its principal financial
support from the Corporation or its Subsidiaries.
15. Binding Effect, Duration and Scope of Agreement. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto, the successors and assigns of the Corporation (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business or assets of the Corporation), spouses,
heirs and personal and legal representatives. This Agreement shall continue in
effect during the Indemnification Period, regardless of whether Indemnitee
continues to serve as a director or as an officer.
16. Severability. If any provision or provisions of this Agreement (or
any portion hereof) 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 shall not in any way be affected or impaired
thereby; and
(b) to the fullest extent legally possible, the provisions of this
Agreement shall be construed so as to give effect to the intent of any provision
held invalid, illegal or unenforceable.
17. Governing Law and Interpretation of Agreement. This Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware, as
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applied to contracts between Delaware residents entered into and to be performed
entirely within Delaware. If the laws of the State of Delaware are hereafter
amended to permit the Corporation to provide broader indemnification rights than
said laws permitted the Corporation to provide prior to such amendment, the
rights of indemnification and advancement of expenses conferred by this
Agreement shall automatically be broadened to the fullest extent permitted by
the laws of the State of Delaware, as so amended.
18. Consent to Jurisdiction. The Corporation and Indemnities each
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Delaware.
19. Entire Agreement. This Agreement represent the entire agreement
between the parties hereto, and there are no other agreements, contracts or
understandings between the parties hereto with respect to the subject matter of
this Agreement, expect as specifically referred to herein or as provided in
Section 13 hereof.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement.
THE PRIMA GROUP INTERNATIONAL, INC.
By: ____________________________________
Its: ____________________________________
----------------------------------------
(INDEMNITEE)
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