INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT this 25th day of September, 1997, by
and between MOTORCAR PARTS & ACCESSORIES, INC., a New York corporation with its
principal office located at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000
(the "Corporation"), and , a director and/or officer of the Corporation
residing at
(the "Indemnitee").
W I T N E S S E T H :
WHEREAS, the Corporation seeks to attract and retain the most
capable persons available to serve as its directors and officers; and
WHEREAS, such persons require substantial protection against
personal liability arising out of their faithful service to the Corporation; and
WHEREAS, the Corporation's Board of Directors adopted and, at
the Corporation's 1989 Annual Meeting of Shareholders, shareholders approved
revised By-law provisions regarding indemnification of, and advancement of
certain expenses to, officers and directors, which replaced the then existing
By-law provisions and existing agreements relating to indemnification and
advancement of expenses; and
WHEREAS, the Corporation and the Indemnitee believe it
desirable to enter into agreements to reflect revised indemnification and
advancement of expenses arrangements;
WHEREAS, in recognition of the Corporation's desire to retain
the services of the Indemnitee and in furtherance of the Corporation's policy,
the Corporation desires to provide the Indemnitee with the right to
indemnification and advancement of expenses and the Indemnitee desires to
receive such right, all upon the terms and subject to the conditions contained
herein;
NOW, THEREFORE, in consideration of the foregoing premises,
the Indemnitee's continued service to the Corporation and the mutual covenants
contained herein, the parties hereby agree as follows:
1. Certain Terms Defined. As used in this Agreement, the
following terms shall have the following meanings:
(a) The term "Action" shall mean any action or proceeding,
whether civil, criminal, administrative or investigative, and including one by
or in the right of the Corporation or by or in the right of any other Entity
which the Indemnitee served in any capacity at the request of the Corporation.
(b) The term "Agreement" shall mean this Indemnification
Agreement, as the same may be amended from time to time.
(c) The term "Board" shall mean the Board of Directors of
the Corporation.
(d) The term "Entity" shall mean any corporation of any type
or kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise.
2. Right to Indemnification. Subject to the terms set forth in
this Agreement, the Corporation shall indemnify the Indemnitee if the Indemnitee
is made, or is threatened to be made, a party to any Action by reason of the
fact that the Indemnitee (or the Indemnitee's testator or interstate) is or was
a director or officer of the Corporation, or served another Entity in any
capacity, against judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys' fees, incurred as a result of such Action or any
appeal therein.
3. Limitation on Indemnification. The Indemnitee shall not be
entitled to indemnification under Section 2 if a judgment or other final
adjudication adverse to the Indemnitee establishes that (i) the Indemnitee's
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) the Indemnitee personally gained in fact a financial profit
or other advantage to which the Indemnitee was not legally entitled.
4. Advances of Expenses. (a) At the written request of
the Indemnitee, the Corporation will advance to the Indemnitee the expenses
(including attorneys' fees) incurred by the Indemnitee in defending any Action
in advance of the final disposition of such Action.
(b) The Indemnitee hereby agrees and undertakes to repay such
advanced amounts (or appropriate portions thereof) as to which it ultimately is
determined that the Indemnitee was not entitled; provided that this undertaking
shall be effective only if and to the extent that, by law, it must be enforced
as a condition to the receipt by the Indemnitee of advanced expenses under this
Section.
5. Payment by Corporation. The Corporation shall pay the
indemnification requested under Section 2 and advance the expenses requested
under Section 4 promptly following receipt by the Corporation of the
Indemnitee's written request therefor and, in any event, no later than thirty
(30) days after such receipt (in the case of requested indemnification) or
fifteen (15) days after such receipt (in the case of requested advanced
expenses).
6. Enforcement. (a) The right of the Indemnitee to
indemnification and advancement of expenses provided by this Agreement shall be
enforceable by the Indemnitee in any court of competent jurisdiction. In such an
enforcement action, the burden shall be on the Corporation to prove that the
indemnification and advancement of expenses being sought are not appropriate.
Neither the failure of the Corporation to determine whether indemnification or
the advancement of expenses is proper in the circumstances nor an actual
determination by the Corporation thereon adverse to the Indemnitee shall
constitute a defense to the action or create a presumption that the Indemnitee
is not so entitled.
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(b) Without limiting the scope of indemnification to which the
Indemnitee is entitled under this Agreement, (i) if the Indemnitee has been
successful on the merits or otherwise in the defense of an Action, the
Indemnitee shall be entitled to indemnification as authorized in Section 2 and
(ii) the termination of any Action by judgment, settlement, conviction or plea
of nolo contendere or its equivalent shall not in itself create a presumption
that the Indemnitee has not met the standard of conduct required for
indemnification under this Agreement.
(c) The Indemnitee's reasonable expenses incurred in
connection with successfully establishing the Indemnitee's right to
indemnification or advancement or expenses, in whole or in part, in any such
proceeding under this section also shall be indemnified by the Corporation.
7. Non-Exclusivity. Nothing contained in this Agreement shall
limit the right to indemnification and advancement of expenses to which the
Indemnitee would be entitled by law in the absence of this Agreement, or shall
be deemed exclusive of any other rights to which the Indemnitee in seeking
indemnification or advancement of expenses may have or hereafter be entitled
under any law, provision of the Certificate of Incorporation, By-Law, agreement
approved by or resolution of the Board, or resolution of shareholders of the
Corporation.
8. Subrogation. (a) The Corporation shall not be liable under
this Agreement to make any payment in connection with any claim made against the
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, By-Law or otherwise) of the amounts otherwise
subject to indemnification or expense advance under this Agreement.
(b) 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 the Indemnitee other than from the Corporation, and the
Indemnitee shall execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such documents
necessary to enable the Corporation effectively to bring suit to enforce such
rights.
9. Notice of Claim. As a condition precedent to the right to
be indemnified under this Agreement, the Indemnitee shall give the Corporation
written notice as soon as practicable of any claim made against the Indemnitee
for which indemnification or expense advances will or could be sought under this
Agreement. In addition, the Indemnitee shall give the Corporation such
information and cooperation as the Corporation reasonably may require.
10. Severability. If this Agreement or any portion hereof
shall be invalidated or held unenforceable on any ground by any court of
competent jurisdiction, the Corporation nevertheless shall indemnify the
Indemnitee to the fullest extent permitted by any applicable portion of this
Agreement that shall not have been so invalidated or held unenforceable.
11. Continuity of Rights. (a) The right of the Indemnitee to
indemnification and advancement of expenses under this Agreement shall (i)
continue after the Indemnitee has ceased to serve in a capacity which would
entitle the Indemnitee to indemnification or advancement of expenses pursuant to
this Agreement with respect to acts or omissions occurring prior to such
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cessation, (ii) inure to the benefit of the heirs, executors and administrators
of the Indemnitee, (iii) apply with respect to acts or omissions occurring prior
to the execution and delivery of this Agreement to the fullest extent permitted
by law and (iv) survive any restrictive amendment or termination of this
Agreement with respect to events occurring prior thereto.
(b) The Corporation and the Indemnitee may be parties to an
existing Indemnification Agreement entered into prior to the date of this
Agreement and said adoption of revised By-law provisions. If so, then upon the
execution and delivery of this Agreement, that existing Indemnification
Agreement shall cease to be of any further force and effect as to any acts or
omissions of the Indemnitee occurring thereafter. Notwithstanding the foregoing,
such existing Indemnification Agreement shall continue to apply if and to the
extent it would afford Indemnitee greater rights and benefits than this
Agreement or Article VII of the Corporation's By-laws with respect to acts or
omissions occurring prior to the execution and delivery of this Agreement or
effective date of said Article VII, as the case may be.
12. Proceedings Initiated by Indemnitee. Other than to the
extent provided in Section 6(c), above, the Indemnitee shall not be entitled to
indemnification or advancement of expenses under this Agreement with respect to
any Action initiated by the Indemnitee, but shall be entitled to indemnification
and advancement of expenses with respect to any counterclaim or third-party
claim in any such Action.
13. Binding Effect. This Agreement shall be binding upon all
successors and assigns of the Corporation (including any transferee of all or
substantially all of its assets and any successor by merger or operation of law)
and shall inure to the benefit of the heirs, personal representatives,
successors, representatives and estate of the Indemnitee.
14. Governing Law. This Agreement shall be governed by,
and be construed and enforced in accordance with, the laws of the State of New
York applicable to contracts made and to be performed in such state, without
giving effect to the principles of conflicts of laws.
15. Effect of Headings. The Section headings herein are
for convenience only and shall not affect the construction hereof.
16. Notices. (a) Any notice, request or other
communication hereunder to or on behalf of the Corporation or the Indemnitee
shall be in writing and shall be delivered to the other party hereto at the
address shown on the first page hereof (in the case of the Corporation,
addressed to the attention of the Board). Any such notice, request or other
communication shall be deemed delivered one business day after sent by Federal
Express, Express Mail or similar overnight delivery service or, if sent
otherwise, then upon the receipt thereof at that address.
(b) Either address referred to in the preceding subsection may
be changed from time to time in the manner specified in the preceding
subsection, and thereafter notices, requests and other communications shall be
delivered to the most recent address so furnished.
17. Counterparts. This Agreement may be executed in any
number of counterparts. Each counterpart of an agreement so executed shall be
deemed an original, but all such
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counterparts shall together constitute but one and the same instrument. In
making proof of this Agreement, it shall not be necessary to produce or account
for more than one counterpart.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
MOTORCAR PARTS & ACCESSORIES, INC.
By: _________________________________
Xxx Xxxxx, Chairman of the Board
and Chief Executive Officer
INDEMNITEE
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