HNI CORPORATION AMENDED AND RESTATED INDEMNITY AGREEMENT
EXHIBIT
10.1
HNI
CORPORATION
AMENDED
AND RESTATED INDEMNITY AGREEMENT
This
Amended and Restated Indemnity Agreement, effective as of ________________
(this
"Agreement"), between HNI Corporation, an Iowa corporation ("Corporation"),
and
_______________ ("Indemnitee").
WITNESSETH:
WHEREAS,
the Corporation entered into an Indemnity Agreement, dated as of __________
(the
"Original Agreement"), with Indemnitee, and the Corporation and Indemnitee
desire to amend and restate the Original Agreement in its entirety;
WHEREAS,
Indemnitee is a director or an officer of the Corporation and, as such, is
or
will be performing valuable services for or on behalf of the Corporation;
and
WHEREAS,
Indemnitee is willing to continue to perform such services, and may from time
to
time perform additional services, for or on behalf of the Corporation on the
condition that Indemnitee is indemnified as provided in this Agreement;
and
WHEREAS,
it is intended that Indemnitee shall be paid promptly by the Corporation all
amounts necessary to fully effectuate the indemnity provided in this Agreement;
and
WHEREAS,
all capitalized terms used in this Agreement are used herein as defined in
Section 15 hereof;
WHEREAS,
the terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to indemnification and shall
supercede and may not be contradicted by evidence of any prior or
contemporaneous agreement, including, without limitation, the Original
Agreement;
NOW
THEREFORE, in order to induce Indemnitee to serve or continue to serve the
Corporation as a director or an officer and in consideration of the mutual
promises set forth herein and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Corporation and the
Indemnitee hereby agree to amend and restate the Original Agreement as
follows:
1. Services
by Indemnitee. Indemnitee agrees to serve as a director or
an officer of the Corporation for so long as Indemnitee is duly appointed or
elected and qualified in accordance with the applicable provisions of the
Articles of Incorporation, as amended ("Articles of Incorporation"), and
By-laws, as amended ("By-laws"), of the Corporation or until such time as
Indemnitee resigns or otherwise ceases to be a director or an
officer. Indemnitee may from time to time also perform other services
at the request or for the convenience of the Corporation. Following
the termination of Indemnitee's service as a director or an officer of the
Corporation by reason of resignation or otherwise, the Corporation shall
continue to be obligated to indemnify Indemnitee under this Agreement for acts
occurring while Indemnitee was serving as a director or an officer of the
Corporation, whether such acts occurred prior to or after the date hereof. Nothing
in this Agreement shall confer upon the Indemnitee the right to continue in
the
employ of the Corporation or affect the right of the Corporation to terminate
the Indemnitee's employment at any time in the sole discretion of the
Corporation with or without cause.
2. Indemnification. Subject
to the limitations set forth in this Section 2 and in Section 6 of this
Agreement, the Corporation hereby agrees to indemnify Indemnitee to the fullest
extent permitted by applicable law and the Articles of Incorporation and the
By-laws, as the same may be amended from time to time, from and against any
and
all Expenses and Liabilities 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, or otherwise with respect to any Proceeding
relating to or arising out of Indemnitee's being or having been, at any time
prior to or after the date hereof, a director or an officer of the Corporation
or as to action taken in another capacity by or on behalf of the Corporation
while serving as such director or officer. The right to
indemnification conferred in this Agreement shall be presumed to have been
relied upon by Indemnitee in Indemnitee's agreeing to serve, or serving, or
continuing to serve, or having served, as a director or an officer of the
Corporation and shall be enforceable as a contract right. Without in
any way limiting the scope of the indemnification otherwise provided by this
Section 2, if and whenever Indemnitee is or was a party or is threatened to
be
made a party to any Proceeding (including without limitation any Proceeding
brought by or in the right of the Corporation) because Indemnitee is or was,
at
any time prior to or after the date hereof, a director or an officer of the
Corporation or because of any act or omission by Indemnitee in any such capacity
by or on behalf of the Corporation, the Corporation shall indemnify Indemnitee
to the fullest extent permitted by applicable law against all Expenses and
Liabilities actually and reasonably incurred by or on behalf of Indemnitee
in
connection with the investigation, defense, settlement or appeal of the
Proceeding. In addition to the foregoing, the rights of Indemnitee to
indemnification provided in this Agreement shall include those rights set forth
in Sections 3 and 8 hereof. Notwithstanding anything in this
Agreement to the contrary and prior to a Change in Control, Indemnitee shall
not
be entitled to indemnification pursuant to this Agreement in connection with
any
claim initiated by Indemnitee against the Corporation or any director or officer
of the Corporation unless the Corporation has joined in or consented to the
initiation of such claim; provided, however, that the Corporation shall
indemnify Indemnitee against any and all Expenses and, if requested by
Indemnitee in writing, shall advance, in accordance with the terms of this
Agreement, such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any claim asserted against or action brought by Indemnitee
for
(i) indemnification or advance payment of Expenses by the Corporation under
this
Agreement or any other agreement, by-law or articles of incorporation now or
hereafter in effect and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Corporation, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance payment or insurance recovery, as the case may
be.
3. Advancement
of Expenses; Establishment of Trust; Letter of Credit.
a. Advancement
of Expenses. All reasonable Expenses incurred by or on
behalf of Indemnitee shall be advanced to Indemnitee from time to time by the
Corporation to the fullest extent permitted by applicable law within 20 days
after the receipt by the Corporation of a written request for the advancement
of
any such Expenses, whether before or after final disposition of a
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Proceeding
(except to the extent that there has been a Final Adverse Determination that
Indemnitee is not entitled to be indemnified for any such Expenses), including
without limitation any Proceeding brought by or in the right of the
Corporation. The written request for an advancement of Expenses under
this Section 3(a) shall contain reasonable details of the Expenses incurred
by
or on behalf of Indemnitee for which advancement is thereby
requested. By executing such a request, Indemnitee shall be deemed to
have made such written affirmation of Indemnitee's good faith belief that
Indemnitee has met the standard of conduct required by law to be met to entitle
Indemnitee to such advancement of Expenses (including, without limiting the
generality of the foregoing, Indemnitee's written affirmation of Indemnitee's
good faith belief that Indemnitee has met the relevant standard of conduct
described in Section 490.851 of the Iowa Business Corporation Act (the "IBCA")
or that the Proceeding involved conduct for which Liability has been eliminated
under a provision of the Articles of Incorporation as authorized by Section
490.202, subsection 2, part d of the IBCA). Advancement of Expenses
by the Corporation in connection with any Proceeding shall be made only upon
delivery to the Corporation of a written undertaking to repay any funds advanced
if the Indemnitee is not entitled to mandatory indemnification under Section
490.852 of the IBCA and it is ultimately determined that the Indemnitee has
not
met the relevant standard of conduct required for indemnification under the
IBCA. Such undertaking must be an unlimited general obligation of
Indemnitee that need not be secured and may be accepted without reference to
financial ability to make repayment; provided, however, that under no
circumstances shall Indemnitee be deemed to have undertaken to repay to the
Corporation Expenses for which Indemnitee has the right to be indemnified under
this Agreement or otherwise.
b. Establishment
of Trust. Upon receipt of a written request from
Indemnitee for advancement of Expenses or indemnification pursuant to this
Agreement, the Corporation shall create a grantor trust (the "Trust"), the
trustee of which shall be chosen by Indemnitee. Upon receipt of any
such written request from Indemnitee, the Corporation shall from time to time
fund the Trust in amounts sufficient to satisfy any and all Expenses and
Liabilities that are reasonably anticipated at the time of such request and
for
which the Corporation may indemnify Indemnitee under this
Agreement. The amount or amounts to be deposited in the Trust
pursuant to this funding obligation shall be determined by mutual agreement
of
Indemnitee and the Corporation or, if Indemnitee and the Corporation are unable
to reach such agreement, by Independent Legal Counsel selected by Indemnitee
and
shall be used exclusively for the uses and purposes set forth in the
Trust. The terms of the Trust shall provide that:
(1) the
Trust shall not be revoked or the principal thereof invaded without the consent
of Indemnitee and the Corporation;
(2) Indemnitee
shall not have any preferred claim to, or any beneficial ownership in, any
assets of the Trust prior to the time that such assets are paid to Indemnitee
as
provided in the Trust;
(3) within
ten days of a request by Indemnitee, the trustee of the Trust shall advance
to
Indemnitee amounts sufficient to satisfy any and all Expenses, provided that
Indemnitee shall have executed and delivered to the Corporation the written
affirmation and the written undertaking required by Section 3(a) of this
Agreement;
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(4) the
Trust shall continue to be funded by the Corporation in accordance with the
funding obligations set forth in this Section 3(b);
(5) the
trustee of the Trust shall promptly pay to Indemnitee any amounts to which
Indemnitee shall be entitled pursuant to this Agreement; and
(6) all
unexpended funds in the Trust shall revert to the Corporation on a final
determination either by Independent Legal Counsel selected by Indemnitee or
by a
court of competent jurisdiction that Indemnitee has been fully indemnified
with
respect to the Proceeding giving rise to the establishment of the Trust under
the terms of this Agreement.
c. Letter
of Credit. In order to secure the
obligations of the Corporation to indemnify and advance Expenses to Indemnitee
pursuant to this Agreement, the Corporation shall obtain at its expense at
the
time of any Change in Control an irrevocable standby letter of credit naming
Indemnitee as the sole beneficiary ("Letter of Credit"). The Letter
of Credit shall be in an appropriate amount not less than $1,000,000, shall
be
issued by a financial institution having assets in excess of $100,000,000 and
shall contain terms and conditions reasonably acceptable to
Indemnitee. The Letter of Credit shall provide that Indemnitee may
from time to time draw certain amounts thereunder, upon written certification
by
Indemnitee to the issuer of the Letter of Credit that Indemnitee has made
written request to the Corporation for an amount not less than the amount
Indemnitee is drawing under the Letter of Credit, that the Corporation has
failed or refused to provide Indemnitee with such amount in full within 20
days
after receipt of such request, and that Indemnitee believes that Indemnitee
is
entitled under the terms of this Agreement to the amount that Indemnitee is
drawing under the Letter of Credit. The issuance of the Letter of
Credit shall not in any way diminish the obligation of the Corporation to
indemnify Indemnitee against Expenses and Liabilities to the full extent
required by this Agreement or otherwise. Once the Corporation has
obtained the Letter of Credit, the Corporation shall at its expense maintain
and
renew the Letter of Credit or a substitute letter of credit meeting the criteria
of this Section 3(c) during the term of this Agreement, so that the Letter
of
Credit shall have an initial term of five years, shall be renewed for successive
five-year terms, and shall always have at least one year of its term remaining
after the termination of this Agreement.
4. Presumptions
and Effect of Certain Proceedings.
a. Upon
making a request for indemnification, Indemnitee shall be presumed to be
entitled to indemnification under this Agreement and the Corporation shall
have
the burden of proof to overcome such presumption in reaching any contrary
determination. The partial or complete disposition of any Proceeding
by judgment, order, settlement, arbitration award, conviction, dismissal, or
acceptance of a plea of nolo contendere or its equivalent, shall not affect
such
presumption and, except as may be provided in Section 6 of this Agreement,
shall
not be determinative that the Indemnitee failed to meet any requisite standard
of conduct and shall not establish a presumption with regard to any other
factual matter relevant to determining the right of Indemnitee to
indemnification under this Agreement or otherwise.
b. If
the person or persons empowered to make a determination pursuant to Section
5 of
this Agreement shall have failed to make the requested determination within
30
days after any judgment, order, settlement, arbitration award, conviction,
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dismissal,
acceptance of a plea of nolo contendere or its equivalent, or other partial
or
complete disposition of any Proceeding or any other event that could enable
the
Corporation to determine the right of Indemnitee to be indemnified under this
Agreement or otherwise, the requisite determination that Indemnitee has the
right to such indemnification shall be deemed to have been made, provided that
such thirty-day period may be extended for a reasonable time (not to exceed
an
additional 30 days), if the person or persons so empowered to make such a
determination in good faith require such additional time to obtain or evaluate
documentation or information relating thereto, and provided further that the
foregoing provisions of this Section 4(b) shall not apply if the determination
of entitlement to indemnification is to be made by the shareholders of the
Corporation pursuant to Section 5(b) of this Agreement and (i) within 15 days
after receipt by the Corporation of the request for such determination, the
Board of Directors resolves to submit such determination to the shareholders
for
their consideration at an annual meeting to be held within 75 days after such
receipt, and such determination is made thereat, or (ii) a special meeting
of
shareholders is called within 15 days after such receipt for the purpose of
making such determination and is held for such purpose within 60 days after
having been so called, and such determination is made thereat.
5. Procedure
for Determination of Right of Indemnitee to be
Indemnified.
a. Whenever
Indemnitee believes that Indemnitee has a right 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
for
the determination of the right of Indemnitee to be indemnified pursuant to
this
Agreement. In any event, Indemnitee shall submit such request for
indemnification within a reasonable time, which shall not exceed five years
after any judgment, order, settlement, arbitration award, conviction, dismissal,
acceptance of a plea of nolo contendere or its equivalent, or other final
disposition of any Proceeding. Upon receipt of any such request for
indemnification, the General Counsel or other appropriate officer of the
Corporation shall promptly advise the Board of Directors in writing that
Indemnitee has made such request. Determination that indemnification
of the Indemnitee is permissible because the Indemnitee has met the relevant
standard of conduct required by the IBCA shall be made not later than 30 days
after the receipt by the Corporation of such written request for
indemnification; provided, however, that any request for indemnification for
Liabilities (other than amounts paid in settlement) with respect to a particular
Proceeding shall be made only after a determination thereof has been made in
that particular Proceeding. If it is so determined that that
indemnification of the Indemnitee is permissible because the Indemnitee has
met
the relevant standard of conduct required by the IBCA, payment to Indemnitee
shall be made within 10 days after such determination.
b. The
Corporation shall be entitled to select the forum in which the right of
Indemnitee to indemnification will be heard; provided, however, if such forum
is
selected after a Change in Control of the Corporation, Independent Legal Counsel
shall determine whether Indemnitee has the right to
indemnification. The forum shall be any one of the
following:
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(1) the
shareholders of the Corporation, but shares owned by or voted under the control
of an Indemnitee or other party to the Proceeding who at the time does not
qualify as a Disinterested Director shall not be voted on the
determination
(2) if
there are two or more Disinterested Directors, by the Board of Directors by
a
majority vote of all the Disinterested Directors, a majority of whom shall
for
such purpose constitute a quorum, or by a majority of the members of a committee
of two or more Disinterested Directors appointed by such a vote; or
(3) Independent
Legal Counsel, who shall make the determination in a written
opinion.
6. Specific
Limitations on Indemnification. Notwithstanding anything in
this Agreement to the contrary, the Corporation shall not be obligated under
this Agreement to make any payment to Indemnitee for indemnification with
respect to any Proceeding:
a. to
the extent that payment is actually made to Indemnitee under any insurance
policy, or is made to Indemnitee by the Corporation or an affiliate of the
Corporation otherwise than pursuant to this Agreement; provided, however,
notwithstanding the availability of any such insurance, Indemnitee also may
claim indemnification from the Corporation pursuant to this Agreement by
assigning to the Corporation any claims under any such insurance to the extent
Indemnitee is paid by the Corporation;
b. if
a court in such Proceeding has entered a judgment or other adjudication that
is
final and has become nonappealable and establishes that the claim of Indemnitee
for indemnification arose from (1) a breach by Indemnitee of Indemnitee's
duty of loyalty to the Corporation or its shareholders, (2) acts or
omissions of Indemnitee that were not in good faith or involved intentional
misconduct or knowing violations of the law, (3) a transaction in which
Indemnitee derived an improper personal benefit, or (4) liability of
Indemnitee to the Corporation pursuant to Section 490.833 of the Iowa Business
Corporation Act (or any successor provision thereto);
c. prior
to the occurrence of a Change in Control, for Liabilities in connection with
any
Proceeding settled without the consent of the Corporation, which shall not
be
unreasonably withheld; or
d. 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.
7. Fees
and Expenses of Independent Legal Counsel. The Corporation
shall pay the reasonable fees and expenses of Independent Legal Counsel or
a
panel of three arbitrators, if Independent Legal Counsel or a panel of
arbitrators is retained to make a determination of the right of Indemnitee
to
indemnification pursuant to Section 5(b) of this Agreement, and to fully
indemnify such Independent Legal Counsel or panel of arbitrators against any
and
all expenses and losses incurred by any of them and arising out of or relating
to this Agreement or their engagement pursuant hereto.
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8. Remedies
of Indemnitee.
a. If
a determination is made pursuant to Section 5 of this Agreement that
Indemnitee is not entitled to indemnification, or if advances of Expenses are
not made to Indemnitee pursuant to this Agreement, or if payment is not timely
made following a determination that Indemnitee has a right to indemnification
pursuant to this Agreement, or if Indemnitee otherwise seeks enforcement of
this
Agreement, Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Iowa of the remedy
sought. Alternatively, unless the determination was made by a panel
of arbitrators pursuant to Section 5(b)(4) of this Agreement, Indemnitee
may elect to seek an award in arbitration to be conducted by a single arbitrator
pursuant to the commercial arbitration rules of the American Arbitration
Association then in effect, and the decision of such arbitrator shall be
rendered within 90 days following the filing of the demand for
arbitration. The Corporation shall not oppose the right of Indemnitee
to seek any such adjudication or arbitration award. In any such
proceeding or arbitration, Indemnitee shall be presumed to be entitled to
indemnification under this Agreement and the Corporation shall have the burden
of proof to overcome such presumption.
b. If
a determination that Indemnitee is not entitled to indemnification, in whole
or
in part, has been made pursuant to Section 5, the decision in the judicial
proceeding or arbitration provided in Section 8(a) shall be made de novo and
Indemnitee shall not be prejudiced by reason of a determination that Indemnitee
is not entitled to indemnification.
c. If
a determination that Indemnitee is entitled to indemnification has been made
pursuant to Section 5 or is deemed to have been made pursuant to Section 4
or
otherwise pursuant to this Agreement, the Corporation shall be bound by such
determination in the absence of a misrepresentation of a material fact by
Indemnitee.
d. The
Corporation shall be precluded from asserting that the procedures and
presumptions of this Agreement are not valid, binding and enforceable, and
the
Corporation shall stipulate in any such court or before any such arbitrator
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 the request of Indemnitee
for indemnification under, seeking enforcement of, or to recover damages for
breach of, this Agreement shall be borne by the Corporation when and as incurred
by Indemnitee irrespective of any Final Adverse Determination that Indemnitee
is
not entitled to indemnification.
9. Insurance.
a. Maintenance
of Insurance. The Corporation represents that it
presently maintains certain policies of directors' and officers' liability
insurance. Subject only to the provisions of this Section 9, the
Corporation agrees that, during the Indemnification Period, the Corporation
shall use its best efforts 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 providing coverage that, in scope and amount
and
all other respects, is no less favorable than that presently
provided.
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Notwithstanding
the foregoing, prior to the occurrence of a Change in Control, the Corporation
shall not be required to maintain such policies of directors' and officers'
liability insurance if such insurance is not reasonably available or if it
is in
good faith determined by the Board of Directors that:
(1) the
premium cost of maintaining such insurance is substantially disproportionate
to
the amount of coverage provided thereunder; or
(2) the
protection provided by such insurance is so limited by exclusions, deductions
or
otherwise that there is insufficient benefit to warrant the cost of maintaining
such insurance.
Notwithstanding
anything in this Agreement to the contrary, to the extent that and for so long
as the Corporation shall choose to continue to maintain any policy of directors'
and officers' liability insurance during the Indemnification Period, the
Corporation shall maintain similar and equivalent insurance for the benefit
of
Indemnitee during the Indemnification Period (regardless of whether such similar
or equivalent insurance is more or less favorable to Indemnitee than the
existing policy or policies of such insurance maintained by the
Corporation).
b. Additional
Indemnification in Lieu of Insurance. If the
Corporation discontinues any policy or policies of directors' and officers'
liability insurance referred to in Section 9(a) of this Agreement or limits
in
any way the scope or amount of the coverages provided thereunder, or such
policies or coverages provided thereunder become unavailable in whole or in
part
for any reason, the Corporation agrees to hold harmless and indemnify Indemnitee
for the remainder of the Indemnification Period to the full extent of the
coverage that would otherwise have been provided for the benefit of Indemnitee
if the insurance specified in Section 9(a) hereof had been
maintained.
10. Modification,
Waiver, Termination and Cancellation. No supplement,
modification, termination, cancellation or amendment of this Agreement shall
be
binding unless executed in writing by both Indemnitee and the
Corporation. No waiver of any provision of this Agreement shall
constitute or be deemed to be (a) a waiver of any other provision of this
Agreement or (b) a continuing waiver.
11. 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 such papers as may be reasonably required and shall do
all
such other things as may be reasonably necessary to secure such rights,
including the execution of such documents as may be reasonably necessary to
enable the Corporation to effectively bring suit to enforce such
rights.
12. 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 civil, criminal, administrative or investigative matter, but
the
omission to so notify the Corporation shall not relieve the Corporation of
any
liability that it may have to Indemnitee if such omission does not materially
prejudice the rights of the Corporation. If such omission does
materially prejudice the rights of the Corporation, the Corporation shall be
relieved from liability under this Agreement only to the
8
extent
of
such prejudice, and no such omission will relieve the Corporation from any
liability that 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
b. The
Corporation, jointly with any other indemnifying party similarly notified,
will
be entitled to assume the defense of Indemnitee therein with counsel reasonably
satisfactory to Indemnitee; provided, however, that the Corporation shall not
be
entitled to assume the defense of Indemnitee in any Proceeding if there has
been
a Change in Control or if Indemnitee has reasonably concluded that there may
be
a conflict of interest between the Corporation and Indemnitee with respect
to
the Proceeding. After notice to Indemnitee from the Corporation of
its election to assume the defense of Indemnitee therein, 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 any 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:
(1) the
employment of counsel by Indemnitee has been authorized by the
Corporation;
(2) Indemnitee
has reasonably concluded that counsel employed by the Corporation may not
adequately represent Indemnitee; or
(3) the
Corporation has not in fact employed counsel to assume the defense of Indemnitee
in the Proceeding or has not in fact assumed such defense or is not acting
with
reasonable diligence in connection therewith; in each of which cases, the fees
and expenses of such counsel shall be borne by the Corporation.
c. The
Corporation shall not settle any Proceeding in any manner that would impose
any
liability, penalty or limitation on Indemnitee without the written consent
of
Indemnitee; provided, however, that Indemnitee will not unreasonably withhold
consent to any proposed settlement.
13. Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom such notice or other communication
shall have been directed or (b) mailed by registered mail with postage
prepaid.
a. If
to Indemnitee, to:
9
b. If
to the Corporation, to:
HNI
Corporation
000
Xxxx
Xxxxxx Xxxxxx
Xxxxxxxxx,
Xxxx 00000-0000
Attention: General
Counsel
or
to
such other address as may be hereafter furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may
be.
14. Nonexclusivity. The
rights of Indemnitee under this Agreement shall not be deemed exclusive of
any
other rights to which Indemnitee may be entitled under the Business Corporation
Act of the State of Iowa, the Articles of Incorporation or By-laws of the
Corporation, or any Agreements, vote of shareholders, resolution of the Board
of
Directors or otherwise and, to the extent that during the Indemnification Period
the rights of the then existing directors and officers are more favorable to
such directors or officers than the rights currently provided to Indemnitee
thereunder or under this Agreement, Indemnitee shall be entitled to the full
benefits of such more favorable rights.
15. Certain
Definitions. For the purposes of this Agreement, the
following terms shall have the following meanings:
a. "Change
in Control" means:
(1) The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i)
the
then outstanding shares of common stock of the Corporation (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities"); provided, however,
that (a) for purposes of this subsection (1), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly from
the Corporation that is approved by a majority of the Incumbent Board (as
defined below), (ii) any acquisition by the Corporation, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by
the
Corporation or any corporation controlled by the Corporation or (iv) any
acquisition by any Person pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (3) of this Section 15(a) and (b) a
Change in Control will not be deemed to have occurred if a Person becomes the
beneficial owner of 20% or more of the Outstanding Corporation Common Stock
or
the Outstanding Corporation Voting Securities as a result of a reduction in
the
number of shares of Outstanding Corporation Common Stock or Outstanding
Corporation Voting Securities pursuant to a transaction or series of
transactions that is approved by a majority of the Incumbent Board unless and
until such Person thereafter becomes the beneficial owner of any additional
shares of Outstanding Corporation Common Stock or Outstanding Corporation Voting
Securities representing 1% or more of the then-outstanding Outstanding
Corporation Common Stock or Outstanding Corporation Voting Securities, other
than as a result of a
stock
dividend, stock split or similar transaction effected by the Corporation in
which all holders of Outstanding Common Stock or Outstanding Voting Securities
are treated equally; or
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(2) individuals
who, as of the date hereof, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least two-thirds of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Corporation's shareholders,
or
appointment, was approved by a vote of at least three-quarters of the directors
then comprising the Incumbent Board (either by a specific vote or by approval
of
the proxy statement of the corporation in which such person is named as a
nominee for director without objection to such nomination) shall be considered
as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation
of
proxies or consents by or on behalf of a Person other than the Board;
or
(3) the
consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Corporation (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50%
of,
respectively, the then-outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an
entity which as a result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly or through one
or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case may
be,
(ii) no Person (excluding the Corporation, any entity resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Corporation or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution
of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(4) approval
by the shareholders of the Corporation of a complete liquidation or dissolution
of the Corporation, except pursuant to a Business Combination that complies
with
clauses (i), (ii) and (iii) of subsection (3) of this Section
15(a).
b. "Disinterested
Director" means a director of the Corporation who, at the time of a vote
referred to in Section 490.853, subsection 3, or 490.855, subsection 2 or 3,
of
the IBCA is not or was not either (1) a party to the Proceeding with respect
to
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which
indemnification is being sought by Indemnitee or (2) an individual having a
familial, financial, professional or employment relationship with the director
whose indemnification or advance for expenses is the subject of the decision
being made, which relationship would, in the circumstances, reasonably be
expected to exert an influence on the director's judgment when voting on the
decision being made.
c. "Expenses"
shall include all direct and indirect costs (including but not limited to
attorneys' fees, retainers, court costs, transcript fees, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage costs, delivery service fees, all other disbursements
or out-of-pocket expenses and reasonable compensation for time spent by
Indemnitee for which Indemnitee is otherwise not compensated by the Corporation
or any third party) actually and reasonably incurred in connection with the
investigation, defense, settlement or appeal of 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.
d. "Final
Adverse Determination" means a determination that Indemnitee is not entitled
to
indemnification pursuant to Section 5 of this Agreement and either
(i) a final, nonappealable adjudication in an Iowa court or decision of an
arbitrator pursuant to Section 8(a) of this Agreement shall have
denied the right of Indemnitee to indemnification under this Agreement or
(ii) Indemnitee shall have failed to file a complaint in an Iowa court or
seek an arbitration award pursuant to Section 8(a) hereof within 120 days
after the determination made pursuant to Section 5 hereof.
e. "Indemnification
Period" means the period of time, prior to or after the date hereof, during
which Indemnitee shall serve as a director or officer of the Corporation and
for
so long thereafter as Indemnitee may be subject to any Proceeding.
f. "Independent
Legal Counsel" means special legal counsel who is selected by the Board of
Directors by a majority vote of all the Disinterested Directors, a majority
of
whom shall for such purpose constitute a quorum, or by a majority of the members
of a committee of two or more Disinterested Directors appointed by such a vote,
or, if there are fewer than two Disinterested Directors, by a majority vote
of
the full Board of Directors, including directors who are not Disinterested
Directors, a majority of whom shall for such purpose constitute a
quorum. Notwithstanding the foregoing, 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 the right of
Indemnitee to indemnification under this Agreement.
g.
"Liabilities" means the obligation to pay a judgment, settlement, penalty,
fine,
including an excise tax assessed with respect to an employee benefit plan,
or
reasonable expenses incurred with respect to a Proceeding.
h. "Proceeding"
means any threatened, pending or completed action, proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal, that
is associated with Indemnitee being or having been, prior to or after the date
hereof, a director or officer of the Corporation.
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16. Binding
Effect; Duration and Scope of Agreement. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by
Indemnitee and the Corporation and their respective successors and assigns
(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, executors, personal representatives and
administrators and other legal representatives. This Agreement shall
continue in effect during the Indemnification Period, regardless of whether
Indemnitee continues to serve as a director or officer of the
Corporation.
17. Severability. If
any provision or provisions of this Agreement shall be held to be illegal,
invalid or otherwise 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. the
provisions of this Agreement shall be construed so as to give effect to the
fullest extent legally possible to the intent of any provisions held to be
illegal, invalid or otherwise unenforceable.
18. Governing
Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Iowa.
19. Entire
Agreement. This Agreement represents the entire Agreement
between the Corporation and Indemnitee, and there are no other Agreements,
contracts or understandings between them with respect to the subject matter
of
this Agreement, except as specifically referred to herein or as provided in
Section 14 hereof.
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IN
WITNESS WHEREOF, this Indemnity Agreement is executed by the Corporation and
the
Indemnitee as of the date first written above.
| HNI Corporation | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
|
INDEMNITEE
|
|||
| Name: | |||
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