EXHIBIT 10(e)
INDEMNITY AGREEMENT
AGREEMENT made as of the _____ day of August, 2002, by and among Gentex
Corporation, a Michigan corporation (the "Corporation") and ________________(the
"Indemnitee") with respect to the following:
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation has recognized that
the present trend in litigation against corporate directors and officers,
together with new legislation, regulations, and rules which increase the
obligations for, and expectations of corporate directors and officers, have
created a reluctance in persons to serve in such a capacity and that such effect
is likely to result in less effective direction and supervision of the
Corporation's business affairs;
WHEREAS, the Board of Directors of the Corporation has determined that
such consequences are so detrimental to the best interests of the Corporation
and its shareholders that its directors and certain officers should be provided
with protection against inordinate risks in order to insure that the most
capable persons available will be attracted to such positions;
WHEREAS, in light of the rising costs and reduced coverage of director
and officer liability insurance, significant new legislation, regulations, and
rules governing the conduct of corporate directors and officers, and amendments
to the Michigan Business Corporation Act ("MBCA"), expanding the scope of
permissible indemnification of directors and officers, and establishing new
procedures for directors or officers to receive an advancement of Expenses (as
defined in Section 1(b)), it is reasonable and necessary for the Corporation to
contractually obligate itself to indemnify its directors for certain costs,
expenses, and other monetary liabilities to the fullest extent permitted by law
and as further provided in this Agreement.
NOW, THEREFORE, in order to induce Indemnitee to serve or continue to
serve the Corporation as a director and/or officer, as applicable, and in
consideration of the mutual covenants and agreements hereinafter set forth, the
parties agree as follows:
1. Definitions. As used herein, the following terms are defined as
follows:
(a) Claim. Any threatened, pending or completed action, suit
or proceeding, or any inquiry or investigation, 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 is or was serving at the request of the
Corporation as a director or officer or agent of another corporation,
partnership, joint venture, trust, or other enterprise, whether for
profit or not, specifically including, not by way of limitation, any
action related to certification of financial and other reports under
the federal securities laws.
(b) Expenses. Attorneys' fees and all other costs, expenses,
and obligations actually and reasonably paid or incurred in connection
with investigating, defending, participating, or being a witness in, or
preparing to defend, participate, or be a witness in any Claim or
appeal therefrom.
2. Agreement to Serve. Indemnitee agrees to serve as a director and/or
officer, as applicable, of the Corporation to the best of his or her
ability as long as he or she is duly elected and qualified in
accordance with the Articles of Incorporation and Bylaws of the
Corporation, or until his or her earlier resignation or removal.
3. Indemnification. Subject to the terms and conditions of this
Agreement, the Corporation hereby agrees to indemnify Indemnitee as
follows:
(a) In the event Indemnitee was, is or becomes a party to or
witness or other participant in, or is threatened to be made a party to
or witness or other participant in a Claim, the Corporation shall
indemnify Indemnitee to the fullest extent permitted by law and as
provided in this Agreement, pursuant to the authorization of the MBCA,
against any and all Expenses, judgments, fines, penalties, and amounts
paid in settlement of such Claim.
(b) The Corporation shall indemnify Indemnitee as soon as
practicable, but in any event not later than thirty (30) days after
written demand is presented to the Corporation.
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4. Condition Precedent to Indemnification. Indemnitee, as a condition
precedent to indemnification under this Agreement, shall tender written
notice to the Corporation as soon as practicable of any Claim made
against him or her for which indemnification will or likely will be
sought under the terms of this Agreement. Notice to the Corporation
shall be directed to: Gentex Corporation, 000 X. Xxxxxxxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attn: Chief Financial Officer. In addition, Indemnitee
shall give the Corporation such information and cooperation as may be
reasonably necessary and requested by the Corporation.
5. Consent of Corporation. No amounts paid in settlement for which
indemnity will be sought hereunder shall be incurred without the
Corporation's written consent, which consent shall not be unreasonably
withheld.
6. Limitations on Indemnity.
(a) The Corporation shall not be liable under this Agreement
to make any payment in connection with any Claim made against
Indemnitee:
(1) For which payment is made to Indemnitee under a
valid and collectible insurance policy, except for
any excess beyond the amount of payment under such
insurance policy;
(2) For which Indemnitee is indemnified by the
Corporation otherwise than pursuant to this
Agreement;
(3) For any of the following: (i) the amount of a
financial benefit received by a director to which he
or she is not entitled; (ii) intentional infliction
of harm on the corporation or the shareholders; (iii)
a violation of Section 551 of the MBCA; or (iv) an
intentional criminal act, except as authorized in
Section 564c of the MBCA;
(4) For an accounting of profits made from the
purchase or sale by Indemnitee of securities of the
Corporation, within the meaning of Section 16(b) of
the Securities Exchange Act of 1934 and amendments
thereto, or similar successor statute or provisions
of any state law; or
(5) For which payment of indemnification by the
Corporation is otherwise prohibited by applicable
law. Both the Corporation and the Indemnitee
acknowledge that in certain instances federal law or
applicable public policy may prohibit the Corporation
from indemnifying its directors and officers under
this Agreement or otherwise. Indemnitee understands
and acknowledges that the Corporation has undertaken
or may be required in the future to undertake with
the Securities and Exchange Commission to submit the
question of indemnification to a certain court in
circumstances for a determination of the
Corporation's right under public policy to indemnify
Indemnitee.
(b) Except as provided in Paragraph 8 hereof, the Corporation
shall not be liable under this Agreement to make any payment
in connection with any action initiated by Indemnitee against
the Corporation or any director of the Corporation, unless the
Corporation has joined in or consented to the initiation of
such action.
7. Payment of Costs and Expenses in Advance. If requested by
Indemnitee, the Corporation shall pay (within ten (10) days of such
written request) any and all costs and Expenses incurred by Indemnitee
in defending or investigating any Claim, in advance of the final
disposition of such Claim, upon the receipt of a written undertaking by
Indemnitee, executed personally or on his or her behalf, to repay any
such amounts if it is ultimately determined that Indemnitee did not
meet the applicable standard of conduct, if any, required by the MBCA
or this Agreement for indemnification under the circumstances.
8. Indemnification for Additional Expenses. The Corporation shall
indemnify Indemnitee against any and all expenses, including attorneys'
fees, incurred by Indemnitee in connection with any action, including
expenses of preparation for such action, brought by Indemnitee for: (a)
indemnification or advance payment of Expenses by the Corporation under
this Agreement; or (b) recovery under any directors' liability
insurance policy or policies maintained by the Corporation; provided,
however, that indemnification under this Paragraph 8 shall be limited
to those circumstances where the Indemnitee is successful in obtaining
a recovery of, or a determination that he or she is entitled to such
indemnification, advance expense payment or insurance recovery.
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9. Partial Indemnification. In the event Indemnitee is entitled to
indemnification hereunder for a portion of the Expenses, judgments,
fines, penalties, and amounts paid in settlement actually and
reasonably incurred by him or her in the investigation, defense, appeal
or settlement of any Claim but not, however, for all of the total
amount thereof, the Corporation shall indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled.
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 or enforce such rights.
11. No Presumption. For purposes of this Agreement, the termination of
any action, suit or proceeding by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification
is not permitted by applicable law.
12. Specific Determination of Entitlement to Indemnification. In the
event Indemnitee is found liable to the Corporation as a result of any
Claim brought by or in the right of the Corporation, whether and the
extent to which Indemnitee is nevertheless entitled to indemnification,
other than for Expenses (for which indemnification is available), under
this Agreement shall be predicted on a determination that
indemnification is appropriate in light of the circumstances of the
case and applicable legal standards, which determination shall be made,
at the option of Indemnitee, by: (a) majority vote of a committee of
two (2) or more disinterested directors appointed by the Board of
Directors; (b) independent legal counsel in a written opinion; or (c)
the court in which the Claim was brought.
13. Liability Insurance. To the extent the Corporation maintains an
insurance policy or policies providing liability insurance for
directors, Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the
coverage extended to any other director of the Corporation, if
Indemnitee is a director; or any of the Corporation's officers, if
Indemnitee is not a director but is an officer.
14. Scope of Agreement. The rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under any provision of
the Corporation's Articles of Incorporation, Bylaws or laws of the
State of Michigan. In the event of any change, after the date of this
Agreement in any applicable law, regulation, or rule which narrows the
right of the Corporation to indemnify its directors or officers, such
changes, to the extent not otherwise required by such law, regulation,
or rule to be applied to this Agreement shall have no effect on this
Agreement or the parties' rights or obligations hereunder.
15. Amendment; Termination and Waiver. This Agreement may be amended,
modified, supplemented, or terminated and any of the terms and
conditions herein may be waived only by the written consent of the
parties hereto. The failure of any party at any time or times to
require performance of any provisions contained herein shall in no
manner affect the right of such party at any later time to enforce the
same.
16. Binding Effect and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Indemnitee and his or her personal
representatives, heirs and assigns, and the Corporation and its
successors and assigns, including any direct or indirect successor of
the Corporation by purchase, merger, consolidation or otherwise to all
or substantially all of the business and/or assets of the Corporation;
provided, however, that no assignment of any rights or delegation of
obligations provided for herein may be made by either party without the
express written consent of the other party. This Agreement shall
continue in effect while Indemnitee is a director or officer of the
Corporation and for the period immediately thereafter, terminating two
(2) years subsequent to the duration of any applicable period of
limitations for commencing any claims.
17. Governing Law; Jurisdiction. The parties hereto acknowledge and
agree that this Agreement shall be to its conflicts of laws principles.
The Corporation and Indemnitee each hereby irrevocably consent to the
jurisdiction of the courts of the State of Michigan 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 Michigan.
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18. Severability. Any provision of this Agreement which may be
prohibited by law, or otherwise held invalid by a court of competent
jurisdiction, shall be ineffective only to the extent of such
prohibition or invalidity and shall not invalidate or otherwise render
ineffective the remaining provisions of this Agreement. Nothing in this
Agreement, however, is intended to or shall be construed as requiring
the Corporation to do or fail to do any act in violation of applicable
law. The Corporation's inability, pursuant to court order, to perform
its obligations under this Agreement shall not constitute a breach of
this Agreement.
19. Entire Agreement. This Agreement sets forth the entire
understanding between the parties with respect to its subject matter
and supersedes all previous written or oral negotiations, commitments,
understandings and agreements, including any written indemnity
agreement in effect at the time of execution of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
GENTEX CORPORATION
By
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Its
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INDEMNITEE
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