RONCO CORPORATION INDEMNIFICATION AGREEMENT
RONCO
CORPORATION
This
Indemnification Agreement (“Agreement”)
is made
as of this ___ day of ___________, ______, by and between Ronco Corporation,
a
Delaware corporation (the “Company”),
and
_____________________ (“Indemnitee”).
WHEREAS,
the
Company and Indemnitee recognize the significant cost of directors’ and
officers’ liability insurance and the general reductions in the coverage of such
insurance;
WHEREAS,
the
Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting officers and directors to expensive litigation
risks at the same time as the coverage of liability insurance has been severely
limited; and
WHEREAS,
the
Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve as officers and directors of the
Company and to indemnify its officers and directors so as to provide them
with
the maximum protection permitted by law.
NOW,
THEREFORE,
in
consideration for Indemnitee’s services as an officer or director of the
Company, the Company and Indemnitee hereby agree as follows:
1. Indemnification.
(a) Third
Party Proceedings.
The
Company shall indemnify Indemnitee if Indemnitee is or was a party or is
threatened to be made a party to any threatened, pending or completed action,
suit, proceeding or any alternative dispute resolution mechanism, whether
civil,
criminal, administrative or investigative (other than an action by or in
the
right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of
the
Company, or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred
by
Indemnitee in connection with such action, suit or proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be
in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere
or its
equivalent, shall not, of itself, create a presumption that Indemnitee did
not
act in good faith and in a manner which Indemnitee reasonably believed to
be in
or not opposed to the best interests of the Company, and, with respect to
any
criminal action or proceeding, had reasonable cause to believe that Indemnitee’s
conduct was unlawful.
(b) Proceedings
By or in the Right of the Company.
The
Company shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or
suit by or in the right of the Company or any subsidiary of the Company to
procure a judgment in its favor by reason of the fact that Indemnitee is
or was
a director, officer, employee or agent of the Company, or any subsidiary
of the
Company, or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees) and, to the fullest extent permitted by
law, amounts paid in settlement actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of such action or suit if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to
be in or not opposed to the best interests of the Company, except that no
indemnification 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 unless
and
only to the extent that the Court of Chancery of the State of Delaware or
the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for
such
expenses which the Court of Chancery of the State of Delaware or such other
court shall deem proper.
(c) Mandatory
Payment of Expenses.
To the
extent that Indemnitee has been successful on the merits or otherwise in
defense
of any action, suit or proceeding referred to in Subsections (a) and
(b) of
this Section 1, or in defense of any claim, issue or matter therein,
Indemnitee shall be indemnified against expenses (including attorneys’ fees)
actually and reasonably incurred by Indemnitee in connection
therewith.
2. Expenses;
Indemnification Procedure.
(a) Advancement
of Expenses.
The
Company shall advance all expenses incurred by Indemnitee in connection with
the
investigation, defense, settlement or appeal of any civil or criminal action,
suit or proceeding referenced in Section 1(a) or (b) hereof (but not
amounts actually paid in settlement of any such action, suit or proceeding).
Indemnitee hereby undertakes to repay such amounts advanced only if, and
to the
extent that, it shall ultimately be determined that Indemnitee is not entitled
to be indemnified by the Company as authorized hereby. The advances to be
made
hereunder shall be paid by the Company to Indemnitee within thirty (30)
days following delivery of a written request therefor by Indemnitee to the
Company.
(b) Notice/Cooperation
by Indemnitee.
Indemnitee shall, as a condition precedent to his right to be indemnified
under
this Agreement, give the Company notice in writing as soon as practicable
of any
claim made against Indemnitee for which indemnification will or could be
sought
under this Agreement. Notice to the Company shall be directed to the President
of the Company at the address shown on the signature page of this Agreement
(or
such other address as the Company shall designate in writing to Indemnitee).
Notice shall be deemed received three business days after the date postmarked
if
sent by domestic certified or registered mail, properly addressed, five business
days if sent by airmail to a country outside of North America; otherwise
notice
shall be deemed received when such notice shall actually be received by the
Company. In addition, Indemnitee shall give the Company such information
and
cooperation as it may reasonably require and as shall be within Indemnitee’s
power.
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(c) Procedure.
Any
indemnification and advances provided for in Section 1 and this
Section 2 shall be made no later than thirty (30) days after receipt
of the
written request of Indemnitee. If a claim under this Agreement, under any
statute, or under any provision of the Company’s Certificate of Incorporation or
Bylaws providing for indemnification, is not paid in full by the Company
within
thirty (30) days after a written request for payment thereof has first been
received by the Company, Indemnitee may, but need not, at any time thereafter
bring an action against the Company to recover the unpaid amount of the claim
and, subject to Section 12 of this Agreement, Indemnitee shall also
be
entitled to be paid for the expenses (including attorneys’ fees) of bringing
such action. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in connection with any action,
suit or proceeding in advance of its final disposition) that Indemnitee has
not
met the standards of conduct which make it permissible under applicable law
for
the Company to indemnify Indemnitee for the amount claimed. However, Indemnitee
shall be entitled to receive interim payments of expenses pursuant to
Subsection 2(a) unless and until such defense may be finally adjudicated
by
court order or judgment from which no further right of appeal exists. It
is the
parties’ intention that if the Company contests Indemnitee’s right to
indemnification, the question of Indemnitee’s right to indemnification shall be
for the court to decide, and neither the failure of the Company (including
its
Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Company (including it Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has
not
met the applicable standard of conduct.
(d) Notice
to Insurers.
If, at
the time of the receipt of a notice of a claim pursuant to Section 2(b)
hereof, the Company has director and officer liability insurance in effect,
the
Company shall give prompt notice of the commencement of such proceeding to
the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Indemnitee, all amounts payable as
a
result of such proceeding in accordance with the terms of such
policies.
(e) Selection
of Counsel.
In the
event the Company shall be obligated under Section 2(a) hereof to
pay the
expenses of any proceeding against Indemnitee, the Company, if appropriate,
shall be entitled to assume the defense of such proceeding, with counsel
approved by Indemnitee, upon the delivery to Indemnitee of written notice
of its
election to do so. After delivery of such notice, approval of such counsel
by
Indemnitee and the retention of such counsel by the Company, the Company
will
not be liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same proceeding,
provided that (i) Indemnitee shall have the right to employ his counsel
in
any such proceeding at Indemnitee’s expense; and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized by the
Company, (B) Indemnitee shall have reasonably concluded that there
may be a
conflict of interest between the Company and Indemnitee in the conduct of
any
such defense, or (C) the Company shall not, in fact, have employed
counsel
to assume the defense of such proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company.
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3. Additional
Indemnification Rights; Nonexclusivity.
(a) Scope.
Notwithstanding any other provision of this Agreement, the Company hereby
agrees
to indemnify the Indemnitee to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized
by the
other provisions of this Agreement, the Company’s Certificate of Incorporation,
the Company’s Bylaws or by statute. In the event of any change, after the date
of this Agreement, in any applicable law, statute, or rule which expands
the
right of a Delaware corporation to indemnify a member of its board of directors
or an officer, such changes shall be, ipso
facto,
within
the purview of Indemnitee’s rights and Company’s obligations, under this
Agreement. In the event of any change in any applicable law, statute or rule
which narrows the right of a Delaware corporation to indemnify a member of
its
board of directors or an officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement shall
have
no effect on this Agreement or the parties’ rights and obligations
hereunder.
(b) Nonexclusivity.
The
indemnification provided by this Agreement shall not be deemed exclusive
of any
rights to which Indemnitee may be entitled under the Company’s Certificate of
Incorporation, its Bylaws, any agreement, any vote of stockholders or
disinterested Directors, the General Corporation Law of the State of Delaware,
or otherwise, both as to action in Indemnitee’s official capacity and as to
action in another capacity while holding such office. The indemnification
provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity even though he
may
have ceased to serve in such capacity at the time of any action, suit or
other
covered proceeding.
4. Partial
Indemnification.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of the expenses, judgments, fines or
penalties actually or reasonably incurred by him in the investigation, defense,
appeal or settlement of any civil or criminal action, suit or proceeding,
but
not, however, for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion of such expenses, judgments, fines or
penalties to which Indemnitee is entitled.
5. Mutual
Acknowledgement.
Both
the Company and Indemnitee acknowledge that in certain instances, Federal
law or
applicable public policy may prohibit the Company from indemnifying its
directors and officers under this Agreement or otherwise. Indemnitee understands
and acknowledges that the Company 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 court in certain circumstances for a
determination of the Company’s right under public policy to indemnify
Indemnitee.
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6. Officer
and Director Liability Insurance.
The
Company shall, from time to time, make the good faith determination whether
or
not it is practicable for the Company to obtain and maintain a policy or
policies of insurance with reputable insurance companies providing the officers
and directors of the Company with coverage for losses from wrongful acts,
or to
ensure the Company’s performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company’s directors, if Indemnitee is a director; or of the
Company’s officers, if Indemnitee is not a director of the Company but is an
officer. Notwithstanding the foregoing, the Company shall have no obligation
to
obtain or maintain such insurance if the Company determines in good faith
that
such insurance is not reasonably available, if the premium costs for such
insurance are disproportionate to the amount of coverage provided, if the
coverage provided by such insurance is limited by exclusions so as to provide
an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.
7. Severability.
Nothing
in this Agreement is intended to require or shall be construed as requiring
the
Company to do or fail to do any act in violation of applicable law. The
Company’s inability, pursuant to court order, to perform its obligations under
this Agreement shall not constitute a breach of this Agreement. The provisions
of this Agreement shall be severable as provided in this Section 7.
If this
Agreement or any portion hereof shall be invalidated on any ground by any
court
of competent jurisdiction, then the Company shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated, and the balance of this
Agreement not so invalidated shall be enforceable in accordance with its
terms.
8. Exceptions.
Any
other provision herein to the contrary notwithstanding, the Company shall
not be
obligated pursuant to the terms of this Agreement:
(a) Claims
Initiated by Indemnitee.
To
indemnify or advance expenses to Indemnitee with respect to proceedings or
claims initiated or brought voluntarily by Indemnitee and not by way of defense,
except with respect to proceedings brought to establish or enforce a right
to
indemnification under this Agreement or any other statute or law or otherwise
as
required under Section 145 of the Delaware General Corporation Law,
but
such indemnification or advancement of expenses may be provided by the Company
in specific cases if the Board of Directors has approved the initiation or
bringing of such suit; or
(b) Lack
of Good Faith.
To
indemnify Indemnitee for any expenses incurred by the Indemnitee with respect
to
any proceeding instituted by Indemnitee to enforce or interpret this Agreement,
if a court of competent jurisdiction determines that each of the material
assertions made by the Indemnitee in such proceeding was not made in good
faith
or was frivolous; or
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(c) Insured
Claims.
To
indemnify Indemnitee for expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) which have been paid directly
to
Indemnitee by an insurance carrier under a policy of officers’ and directors’
liability insurance maintained by the Company.
(d) Claims
Under Section 16(b).
To
indemnify Indemnitee for expenses and the payment of profits arising from
the
purchase and sale by Indemnitee of securities in violation of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or any similar successor
statute.
9. Construction
of Certain Phrases.
(a) For
purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority
to
indemnify its directors, officers, and employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting
or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(b) For
purposes of this Agreement, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on Indemnitee with respect to an employee benefit plan; and references
to “serving at the request of the Company” shall include any service as a
director, officer, employee or agent of the Company which imposes duties
on, or
involves services by, such director, officer, employee or agent with respect
to
an employee benefit plan, its participants, or beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be
in the
interest of the participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Agreement.
10. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original.
11. Successors
and Assigns.
This
Agreement shall be binding upon the Company and its successors and assigns,
and
shall inure to the benefit of Indemnitee and Indemnitee’s estate, heirs, legal
representatives and assigns.
12. Attorneys’
Fees. In
the
event that any action is instituted by Indemnitee under this Agreement to
enforce or interpret any of the terms hereof, Indemnitee shall be entitled
to be
paid all court costs and expenses, including reasonable attorneys’ fees,
incurred by Indemnitee with respect to such action, unless as a part of such
action, the court of competent jurisdiction determines that each of the material
assertions made by Indemnitee as a basis for such action were not made in
good
faith or were frivolous. In the event of an action instituted by or in the
name
of the Company under this Agreement or to enforce or interpret any of the
terms
of this Agreement, Indemnitee shall be entitled to be paid all court costs
and
expenses, including attorneys’ fees, incurred by Indemnitee in defense of such
action (including with respect to Indemnitee’s counterclaims and cross-claims
made in such action), unless as a part of such action the court determines
that
each of Indemnitee’s material defenses to such action were made in bad faith or
were frivolous.
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13. Notice.
All
notices, requests, demands and other communications under this Agreement
shall
be in writing and shall be deemed duly given (i) if delivered by hand
and
receipted for by the party addressee, on the date of such receipt, or
(ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement,
or
as subsequently modified by written notice.
14. Consent
to Jurisdiction.
The
Company and Indemnitee each hereby 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.
15. Choice
of Law.
This
Agreement shall be governed by and its provisions construed in accordance
with
the laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within Delaware without
regard to the conflict of law principles thereof.
16. Period
of Limitations.
No
legal action shall be brought and no cause of action shall be asserted by
or in
the right of the Company against Indemnitee, Indemnitee’s estate, spouse, heirs,
executors or personal or legal representatives after the expiration of two
years
from the date of accrual of such cause of action, and any claim or cause
of
action of the Company shall be extinguished and deemed released unless asserted
by the timely filing of a legal action within such two-year period; provided,
however,
that if
any shorter period of limitations is otherwise applicable to any such cause
of
action, such shorter period shall govern.
17. Subrogation.
In the
event of 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 documents required and shall do all acts that may be necessary
to
secure such rights and to enable the Company effectively to bring suit to
enforce such rights.
18. Amendment
and Termination.
No
amendment, modification, termination or cancellation of this Agreement shall
be
effective unless it is in writing signed by both 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.
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19. Integration
and Entire Agreement.
This
Agreement sets forth the entire understanding between the parties hereto
and
supersedes and merges all previous written and oral negotiations, commitments,
understandings and agreements relating to the subject matter hereof between
the
parties hereto
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
| RONCO CORPORATION | |
| Signature of Authorized Signatory | |
| Print Name and Title | |
| Address: ______________________________ | |
| ______________________________ | |
| AGREED TO AND ACCEPTED: | |
| INDEMNITEE: | |
| Signature | |
| Print Name and Title | |
| Address: ______________________________ | |
| ______________________________ | |
| ______________________________ | |
