Exhibit 99(d)
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made as of the 14th
day of July, 2004, by and among Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx (collectively
with Xxxxxxx Xxxxxxx, the "Indemnitors"), Xxxxx Xxxxxx, Xxxxxxx Xxxxxxx and
Xxxxxx Xxxxxx (collectively with Xxxxx Xxxxxx and Xxxxxxx Xxxxxxx, the
"Indemnitees").
BACKGROUND
WHEREAS, the Indemnitors are officers, directors and shareholders of
General Bearing Corporation, a Delaware corporation (the "Corporation") engaged
in the manufacture, sourcing, assembly and distribution of bearing components
and bearing products; and
WHEREAS, the Indemnitees are independent members of the board of directors
of the Corporation; and
WHEREAS, the Indemnitors are part of a group of certain members of the
management of the Corporation that has, through GBC Acquisition Corp., a
Delaware corporation that the Indemnitors control (the "Purchaser"), commenced a
tender offer to purchase at a price of $4.00 per share all outstanding shares of
common stock of the Corporation not currently owned by the Continuing
Stockholders (as defined in the terms of the Purchaser's Offer to Purchase), on
the terms and subject to the conditions specified in the Offer to Purchase and
related letter of transmittal (the "Offer"); and
WHEREAS, in conjunction with the Offer, the board of directors of the
Corporation met and elected to remain neutral with respect thereto;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound hereby, the parties
agree as follows:
1. Joint and Several Obligations of the Indemnitors.
(a) The Indemnitors, jointly and severally, agree to indemnify and
hold harmless the Indemnitees and each of their respective heirs, executors,
administrators, successors and assigns (individually, an "Indemnified Party,"
and, collectively, the "Indemnified Parties") from and against, and pay or
reimburse the Indemnified Parties for, all losses, obligations, expenses,
claims, damages or liabilities (whether or not resulting from third-party claims
and including, without limitation, interest, penalties, out-of-pocket expenses
and the Indemnified Parties' attorneys' fees and costs incurred in the
investigation or defense of any of the same or in asserting any of their rights
hereunder) (collectively, "Costs") resulting from or arising out of actions or
omissions of such Indemnified Parties taken or omitted to be taken on behalf of
the Corporation within the scope of such Indemnified Parties' official
capacities in connection with the Offer and the transactions contemplated
thereby to the fullest extent permitted by the Delaware General Corporation Law,
the Certificate of Incorporation or Bylaws of the Corporation in effect as of
the date of this Agreement. Except as set forth below in Section 1(b), the
Indemnitors agree to advance to any Indemnified Party expenses incurred in
defending any action or suit with respect to any of the foregoing matters to the
fullest extent permitted by the Delaware General Corporation Law (and without
requiring the Indemnified Parties to provide any bond or other security in
respect thereof).
(b) Any Indemnified Party wishing to claim indemnification under
Section 1(a) shall provide notice to the Indemnitors promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and the Indemnified Party shall permit the Indemnitors (at their
expense) to assume the defense of any claim or any litigation resulting
therefrom; provided, however, that (i) counsel for the Indemnitors, who shall
conduct the defense of such claim or litigation shall be reasonably satisfactory
to the Indemnified Party and the Indemnified Party may participate in such
defense at such Indemnified Party's expense, and (ii) the omission by any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnitors of their indemnification obligations under this Agreement, except to
the extent the Indemnitors are prejudiced as a result of such failure to give
notice. In the event that the Indemnitors do not promptly assume the defense of
any matter as above provided, or counsel for the Indemnified Parties reasonably
believes and advises the Indemnified Parties in writing that there are issues
that raise conflicts of interest between the Indemnitors and the Indemnified
Parties or among the Indemnified Parties, each group of Indemnified Parties who
is not subject to such conflicts may retain counsel satisfactory to such group,
and the Indemnitors shall pay all reasonable fees and expenses of such counsel
for each such group of Indemnified Parties promptly as statements therefor are
received; provided, however, that the Indemnitors shall not be responsible for
the fees and expenses of more than one law firm for each group of Indemnified
Parties without any such conflicts. The Indemnitors shall not, in the defense of
any such claim or litigation, except with the consent of the Indemnified Party
(which consent shall not be unreasonably withheld), consent to entry of any
judgment or enter into any settlement that provides for injunctive or other
nonmonetary relief affecting the Indemnified Party or that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability with respect to such claim or
litigation.
(c) Notwithstanding the foregoing provisions of Sections 1(a) and
1(b) above, it is specifically understood that the indemnity provided in this
Agreement may only be sought if and to the extent that the combination of (i)
any directors and officers insurance policy maintained by the Corporation or the
corporation surviving the Merger (as defined in the Offer to Purchase) (the
"Surviving Corporation") and (ii) the indemnity provided in the Certificate of
Incorporation or Bylaws of the Corporation is not adequate to satisfy fully the
Costs. It is specifically understood that the Indemnified Parties will first
exhaust all reasonable remedies to collect under or pursuant to any such
directors and officers insurance policy and corporate indemnity referenced in
the preceding sentence before seeking indemnification, payment or advancement of
fees or expenses from the Indemnitors under the terms of this Agreement.
2. Notice to Indemnitors. The Indemnitors shall perform their respective
obligations under this Agreement upon receipt of written demand for such
performance from an Indemnified Party, and, if the Indemnitors fail to perform
their obligations under this Agreement on demand, an Indemnified Party may then
at any time bring legal action against the Indemnitors to obtain full and
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complete performance of their obligations under this Agreement. In the event
that a final, non-appealable determination is rendered in any such action that
the Indemnitors have breached any of their obligations that arise pursuant to
the terms of this Agreement, the Indemnitors shall pay to the Indemnified Party,
in addition to all the sums that the Indemnitors may be called on to pay, a
reasonable sum for the Indemnified Party's attorneys' fees and costs in pursuing
such action.
3. Advancement of Expenses. Upon written request to the Indemnitors by an
Indemnified Party, the Indemnitors shall advance to the Indemnified Party
amounts to cover Costs in advance of the final disposition of them, upon receipt
of (i) an undertaking by or on behalf of the Indemnified Party to repay such
amount if it shall ultimately be determined by final judgment of a court of
competent jurisdiction that he or she is not entitled to be indemnified by the
Indemnitors under this Agreement, and (ii) satisfactory evidence as to the
amount of such expenses. The Indemnified Party's written certification together
with a copy of the statement paid or to be paid by the Indemnified Party shall
constitute satisfactory evidence absent manifest error.
4. Settlement. No settlement of any matter for which indemnification may
be sought under this Agreement shall be entered into by an Indemnified Party
without the consent of the Indemnitors, which consent shall not be unreasonably
withheld; provided, however, that the Indemnified Parties shall not be required
to seek the consent of the Indemnitors to a settlement of a matter for which
indemnification may be sought under this Agreement if the Indemnitors have
breached any of their respective obligations under the terms of this Agreement.
If the Indemnitors shall unreasonably reject a settlement proposed by an
Indemnified Party, then, in addition to any other indemnification for which the
Indemnitors may be liable hereunder, the Indemnitors shall be liable, without
limitation or restriction hereunder except as set forth in Section 1(c) of this
Agreement, to indemnify such Indemnified Party for the excess of any of the
amount for which such Indemnified Party is ultimately liable, by judgment,
settlement or otherwise, over the amount of the settlement rejected by the
Indemnitors.
5. Nonexclusivity. The indemnification rights granted to the Indemnified
Parties under this Agreement shall not be deemed exclusive of, or in limitation
of, any rights to which the Indemnified Parties may be entitled under governing
law, the Certificates of Incorporation of the Corporation or the Surviving
Corporation or their respective bylaws or otherwise; provided, however, that the
indemnification and other rights granted to the Indemnified Parties under this
Agreement shall be exclusive rights and remedies to which the Indemnified
Parties may be entitled as against the Indemnitors in their personal capacity.
6. Successors and Assigns. The rights granted to the Indemnified Parties
under this Agreement shall inure to the benefit of the Indemnified Parties and
their respective personal representatives, heirs, executors, administrators,
beneficiaries, successors and assigns, and this Agreement shall be binding upon
the Indemnitors and their respective personal representatives, heirs, executors,
administrators, beneficiaries, successors and assigns.
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7. Continuation of Indemnity. All agreements and obligations of the
Indemnitors contained in this Agreement shall continue during the period the
Indemnified Parties are directors of the Corporation or the Surviving
Corporation and shall continue until December 31, 2010.
8. Governing Law. This Agreement and all disputes arising under this
Agreement shall be governed, construed, and decided in accordance with the laws
of the State of New York without respect to its choice of law provisions.
9. Notices. Any notice, request, or other communication required or
permitted to be given hereunder by any party to any other shall be effected by
(i) personal delivery in writing, (ii) telegram, or (iii) registered or
certified first class mail, postage prepaid and return receipt requested,
addressed as set forth in the records of the Corporation. Any party's address
may be changed by written notice to all other parties.
10. Severability. The provisions of this Agreement shall be severable. If
any provision of this Agreement or the application thereof for any reason or
circumstances shall to any extent be held to be invalid or unenforceable, the
remaining provisions of this Agreement or the application of such provision to
persons or entities other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
11. Assignment. Except as expressly provided herein, no portion of this
Agreement or any right or obligation hereunder may be assigned, in whole or in
part, whether by operation of the law or otherwise, by any party hereto without
the prior written consent of all parties hereto.
12. Amendment. No amendment, modification, or discharge of this Agreement,
and no waiver hereunder, shall be valid or binding unless set forth in writing
and duly executed by the party against whom enforcement thereof is sought.
13. Waiver. No waiver of, no delay in exercising, and no omission to
exercise, any rights or remedies by any party shall be construed as a waiver by
such party of any other rights or remedies that such party may have under this
Agreement.
14. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
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IN WITNESS WHEREOF, each party has caused this Indemnification Agreement
to be signed as of the date first above written.
INDEMNITORS:
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Xxxxxxx Xxxxxxx
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Xxxxx Xxxxxxx
INDEMNITEES:
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Xxxxx Xxxxxx
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Xxxxxxx Xxxxxxx
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Xxxxxx Xxxxxx
