INDEMNITY AGREEMENT
Exhibit 10.3
This Agreement is made as of the _____ day of _______________, 2002, by and between TAYCO DEVELOPMENTS, INC., a New York corporation having an office at 000 Xxxxxx Xxxxx, Xxxxx Xxxxxxxxx, Xxx Xxxx 00000-0000 (the "Corporation"), and _________________________, an individual residing at ______________________________ ("Indemnitee"), a director [and] [officer] of the Corporation.
WHEREAS, it is essential to the Corporation to retain and attract as directors and officers the most capable persons available; and
WHEREAS, it is the policy of
the Corporation to indemnify its directors and officers so as to provide them
with the maximum possible protection permitted by law; and
WHEREAS, Section 722 of the
Business Corporation Law of New York, under which the Corporation is organized,
empowers corporations to indemnify any person serving as a director, officer,
employee or agent of the corporation and any person who serves at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise, and such
Section 722 specifies that the indemnification set forth therein shall not
be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any by-law, agreement, vote of shareholders or
disinterested directors or otherwise; and
WHEREAS, in order to serve,
Indemnitee desires indemnification to the extent of the maximum protection
permitted by law.
NOW, THEREFORE, in
consideration of the mutual covenants set forth herein, the Corporation and
Indemnitee hereby agree as follows:
1. Agreement to
Serve. Indemnitee
agrees to serve as a director and/or officer of the Corporation for so long as
he is duly elected or appointed or until the effective date of his written
resignation. This Agreement does not constitute an employment agreement or
confer any employee or other compensation rights other than the rights with
respect to indemnification, advancement or Expenses (as defined below) and, if
any, maintenance of directors and officers liability insurance specified
herein.
2.
Definitions. As used
in this Agreement:
(a) The term "Proceeding" shall include any threatened,
pending or completed action, suit or proceeding, whether brought in the right of
the Corporation or otherwise and whether of a civil, criminal, administrative or
investigative nature, in which Indemnitee may be or may have been involved as a
party, a witness or otherwise, by reason of the fact that Indemnitee is or was a
director or officer of the Corporation, by reason of any action taken by him or
of any inaction on his part while acting as such director or officer, or by
reason of the fact that he is or was serving at the request of the Corporation
as a director, officer, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, whether or not he is
serving in such capacity at the time any liability or expense is incurred for
which indemnification or reimbursement may be provided under this
Agreement.
(b) The term "Expenses" includes, without limitation
thereto, expenses of investigations, judicial or administrative proceedings or
appeals, amounts paid in settlement by or on behalf of Indemnitee, attorneys'
fees and disbursements, but shall not include the amount of judgments, fines or
penalties against Indemnitee.
(c) "Change in
Control" means a change in control of the Corporation occurring after the date
of this Agreement of a nature that would be required to be reported under the
Securities Exchange Act of 1934 or any regulation or rule thereunder
(collectively the "Act"), whether or not the Corporation is then subject to such
reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if after the date of this
Agreement (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Act), other than a person who is presently
a member of the board of directors of the Corporation, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities;
(ii) the Corporation is a party to a merger,
consolidation, sales of assets or other reorganization, or a proxy contest, as a
consequence of which members of the board of directors of the Corporation in
office immediately prior to such transaction or event constitute less than a
majority of the board of directors thereafter; or (iii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the board of directors (including for this purpose any new director
whose election or nomination for election by the Corporation's shareholders was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period) cease for any reason to
constitute a majority of the board of directors.
(d) "Corporate Status"
means and describes the status of a person who is or was a director, officer,
employee, agent or fiduciary of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee, agent or fiduciary
of any other "Other Enterprise."
(e) The term "Disinterested Director" means a director of the Corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.
(f) The term "Other
Enterprise" shall include any wholly or partly owned subsidiary of the
Corporation, any employee compensation or benefit plan of any one or more of the
Corporation and its subsidiaries and affiliates, and any other corporation,
partnership, joint venture, trust or enterprise of which the Indemnitee is or
was serving at the request of the Corporation as a director, officer, employee,
agent or otherwise.
(g) Reference to
"fines" shall include, any excise tax assessed with respect to any employee
benefit plan; references to "serving at the request of the Corporation" shall
include any service as a director, officer, employee or agent of the Corporation
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 a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Agreement.
3. Indemnity and Advancement of
Expenses to the Extent Permitted by Law. Subject to the terms of Paragraph 8 of this
Agreement, the Corporation shall indemnify and advance Expenses to the
Indemnitee to the fullest extent permitted by applicable law now in effect.
Without limitation of the foregoing, indemnification shall be deemed to be
permitted by applicable law for purposes of this Agreement if indemnification is
required by Paragraph 4 or 5 hereof, and advancement of expenses shall be
deemed permitted under applicable law, and as more particularly set forth in
Paragraph 8 hereof.
4. Indemnity in Third Party
Proceedings. The
Corporation shall indemnify Indemnitee in accordance with the provisions of this
Paragraph 4 if Indemnitee is a party to or is threatened to be made a party
to or is otherwise involved in any Proceeding (other than a Proceeding by or in
the right of the Corporation to procure a judgment in its favor) against all
Expenses, liabilities, judgments, fines and penalties actually and reasonably
incurred by Indemnitee in connection with the defense or settlement of such
Proceeding, but only if Indemnitee acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation and, in the case of a criminal Proceeding, in addition, had no
reasonable cause to believe that his conduct was unlawful.
5. Indemnity in Proceedings By or In
the Right of the Corporation. The Corporation shall indemnify Indemnitee in
accordance with the provisions of this Section if Indemnitee is a party to or is
threatened to be made a party to or is otherwise involved in any Proceeding by
or in the right of the Corporation to procure a judgment in its favor (a
"Corporation Claim") against all Expenses actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such Proceeding, but
only if he acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Corporation; provided,
however, that no indemnification shall be made under this Paragraph 5 for
(i) judgments, fines, penalties, or amounts paid in
settlement by or on behalf of Indemnitee; or (ii) other
Expenses in respect of any claim, issue or matter as to which Indemnitee shall
have been adjudged to be liable to the Corporation, unless and only to the
extent that any court in which such Proceeding was brought shall determine upon
application that, despite any adjudication of liability but in view of all
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such judgments, fines, penalties, or Expenses as such court shall
deem proper.
6. Exceptions to Indemnitee's
Rights.
Notwithstanding any other provisions of this Agreement, the Corporation shall
not be liable to make any payment in connection with any claim made against the
Indemnitee:
(a) to the extent that
payment is actually made to Indemnitee under any insurance policy;
(b) to the extent that
Indemnitee is indemnified and actually paid otherwise than pursuant to this
Agreement;
(c) if such claim is
proven by a final judgment in a court of law or in other adjudication to have
been based upon or attributable to the Indemnitee's having gained any personal
profit or advantage to which he was not legally entitled;
(d) for disgorgement
of profits, made from the purchase and sale by the Indemnitee of securities,
pursuant to Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any state statutory law or common
law; or
(e) brought about or contributed to by the dishonesty of the Indemnitee seeking payment hereunder; provided, however, that the Indemnitee shall be entitled to the benefit of this Agreement as to any claim upon which suit may be brought against him by reason of any alleged dishonesty on his part, unless a judgment or other final adjudication thereof adverse to the Indemnitee shall establish that he committed (i) acts of active and deliberate dishonesty; (ii) with actual dishonest purpose and intent; (iii) which acts were material to the cause of action so adjudicated.
7. Indemnification of Expenses of
Successful Party. To
the extent that Indemnitee has been successful, on the merits or otherwise, in
defense of any Proceeding or in defense of any claim, issue or matter therein,
including the dismissal of an action without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection therewith.
8. Advancement of
Expenses. The
Expenses incurred by Indemnitee with respect to any Proceeding governed by
Paragraph 4 or 5 shall be paid by the Corporation at reasonable intervals
in advance of any final resolution of such Proceeding, in each case within
20 days after the Corporation receives Indemnitee's written request
therefor; provided, however, that Indemnitee shall undertake to repay such
amounts to the Corporation to the extent that it is ultimately determined that
Indemnitee was not entitled to indemnification of such Expense, as hereinafter
provided.
In the event, and to the extent that, the
Corporation has made any advances to the Indemnitee for Expenses which are
determined at some later time to be within the category of exceptions to this
Agreement set forth in Paragraph 6, or to which Indemnitee is not otherwise
entitled, Indemnitee hereby agrees to reimburse the Corporation in full for such
Expenses, within 90 days after written notice by the Corporation of such
determination; and Indemnitee further agrees that execution and delivery by him
of this Agreement shall constitute a valid and binding obligation on the part of
Indemnitee, and his successors and assigns, to repay such obligation in
full.
9. Rights of Indemnitee to
Indemnification Upon Application; Procedures Upon
Application. Any
indemnification under Paragraph 4 or 5 shall be made no later than
45 days after receipt of the written request of Indemnitee for
indemnification together with documentation in support of such request, unless
the Corporation determines within such 45-day period that the Indemnitee has not
met the relevant standards for indemnification set forth in Paragraph 4 or
5, as the case may be, and is not otherwise entitled to indemnification under
applicable law; provided, however, that if, within such 45-day period, the
Corporation has not reached any determination hereunder, any payment made to
Indemnitee pursuant to this Paragraph 9 shall be made subject to and
conditioned upon Indemnitee's agreement to reimburse the Corporation within 20
days of demand by the Corporation therefor, to the extent that the Corporation
subsequently determines that Indemnitee was not entitled to receive such
payment.
The determination as to entitlement shall be
made as follows. If there has been no Change in Control prior to the date of
determination of entitlement to indemnification, the determination shall be made
by (i) the Board of Directors of the Corporation by a
majority vote of a quorum consisting of Disinterested Directors; or
(ii) if a quorum of Disinterested Directors is not
obtainable, by independent legal counsel reasonably acceptable to the
Corporation, but retained by Indemnitee at his sole expense, in a written
opinion, in form and substance reasonably satisfactory to the Corporation, that
indemnification in the particular case is permissible.
10. Presumptions as to the
Indemnitee's Conduct.
For the purposes of this Agreement, the Indemnitee's conduct shall not be deemed
to have been knowingly fraudulent or deliberately dishonest, the Indemnitee
shall not be deemed to have had any reasonable cause to believe the Indemnitee's
conduct was unlawful, nor shall any presumption arise that the Indemnitee did
not meet any particular standard of conduct or have any particular belief, if
the Indemnitee's conduct was based on (i) the records
or books of account of the Corporation or Other Enterprise; (ii) information
supplied to the Indemnitee by an officer or officers of the Corporation or Other
Enterprise in the course of such individual's duties; (iii) the advice
of legal counsel for the Corporation or Other Enterprise; or (iv) information
or records given or reports made to the Corporation or Other Enterprise by an
independent public accountant, by an appraiser or by other experts selected by
the Corporation or Other Enterprise. The knowledge, actions or failures to act
of any director, officer, employee or agent of the Corporation shall not be
imputed to the Indemnitee for the purposes of determining the right to
indemnification under this Agreement. An Indemnitee who acted in good faith and
in a manner the Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit or compensation plan shall
be deemed to have acted in a manner not opposed to the best interests of the
Corporation. The termination of any Proceeding which is covered by this
Agreement by judgment, order, settlement (whether with or without court
approval) or conviction, or a plea of nolo contendere or its equivalent
shall not of itself create a presumption for the purposes of this Agreement that
the Indemnitee did not act in good faith and in a manner which the Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal Proceeding, had reasonable cause
to believe the conduct of the Indemnitee was unlawful.
11. Indemnification Hereunder Not
Exclusive. The
indemnification provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may be entitled under the Corporation's
Certificate of Incorporation or By-Laws, any agreement, any vote of shareholders
or disinterested directors, the Business Corporation Law of the State of New
York, or otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. If the New York Business
Corporation Law, or the Certificate of Incorporation or By-laws of the
Corporation is amended after the date of this Agreement to limit or restrict
indemnification permitted to the Indemnitee, then with respect to all matters
arising prior to the effective date of such amendment the Corporation shall
nevertheless indemnify the Indemnitee to the fullest extent permitted by this
Agreement, the Certificate of Incorporation or By-laws, and such law as in
effect prior to such amendment.
12. Corporation Participation in
Litigation. With
respect to any proceeding for which indemnification is requested, the
Corporation will be entitled to participate therein at its own expense and,
except as otherwise provided below, to the extent that it may wish, the
Corporation may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Corporation to the Indemnitee of its election
to assume the defense of a Proceeding, the Corporation will not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof, other than as provided below.
The Corporation shall not settle any Proceeding in any manner which would impose
any penalty or limitation on the Indemnitee without the Indemnitee's written
consent. The Indemnitee shall have the right to employ his own counsel in any
Proceeding, but the fees and expenses of such counsel incurred after notice from
the Corporation of its assumption of the defense of the Proceeding shall be at
the expense of the Indemnitee, unless (i) the
employment of counsel by the Indemnitee has been approved by a majority vote of
a quorum consisting of Disinterested Directors; (ii) the
Indemnitee or the Corporation shall have reasonably concluded that there may be
a conflict of interest between the Corporation and the Indemnitee in the conduct
of the defense of a proceeding and shall have communicated such conclusion, with
a full statement of the reasons, in writing to the Corporation; or (iii) the
Corporation shall not in fact have employed counsel to assume the defense of a
Proceeding, in each of which cases the fees and expenses of the Indemnitee's
counsel shall be advanced by the Corporation. The Corporation shall not be
entitled to assume the defense of any Corporation Claim.
13. Continuation of Right of
Indemnification and Advancement of Expenses. The rights of the Indemnitee under this
Agreement shall continue as to the Indemnitee after termination for any reason
of Corporate Status, and shall inure to the benefit of the heirs, personal
representatives, successors and assigns of the Indemnitee.
14. Maintenance of Directors and
Officers Liability Insurance. The Corporation agrees that, so long as the
Indemnitee shall have a Corporate Status and thereafter so long as the
Indemnitee shall be subject to any Proceeding, the Corporation shall purchase
and maintain in effect for the benefit of the Indemnitee one or more valid,
biding and enforceable policies of directors and officers liability insurance.
The Corporation shall not be required to maintain any policies of directors and
officers liability insurance if, in the sole discretion and reasonable business
judgment of the directors of the Corporation, (i) such
insurance is not reasonably available; or (ii) the premium
cost for such insurance is substantially disproportionate to the amount of
coverage provided; or (iii) the coverage provided by such insurance is so
limited by exclusions that there would be insufficient benefit from such
insurance.
15. Partial
Indemnification. If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Corporation for some or a portion of the Expenses, judgments, fines or
penalties actually and reasonably incurred by him in the investigation, defense,
appeal or settlement of any Proceeding but not for the total amount thereof, the
Corporation shall nevertheless provide indemnification to Indemnitee for that
portion of such Expenses, judgment, fines or penalties for which Indemnitee is
entitled to be indemnified hereunder.
16.
Severability. If any
provision of this Agreement or application of any such provision to any person
or circumstance is held invalid, the remainder of this Agreement, and the
application of such provision other than to the extent it is held invalid, will
not be invalidated or affected thereby.
17. Notice. Indemnitee shall, as a condition precedent to
his right to be indemnified under this Agreement, give the Corporation notice in
writing as soon as practicable of any claim made against him for which indemnity
will or could be sought under this Agreement. In addition, Indemnitee shall give
the Corporation such information and cooperation as it may reasonably require
and shall be within Indemnitee's power. Notice to the Corporation shall be
directed to TAYCO DEVELOPMENTS, INC., 000 Xxxxxx Xxxxx, Xxxxx Xxxxxxxxx, Xxx
Xxxx 00000-0000, Attention: President (or such other address as the Corporation
shall designate in writing to Indemnitee). Notices to Indemnitee shall be
directed to the Indemnitee at the address of the Indemnitee as shown at the
beginning of this Agreement (or such other address as the Indemnitee shall
designate in writing to the Corporation). Notices shall be deemed received three
days after the date postmarked if sent by prepaid mail, property
addressed.
18.
Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall
constitute one and the same original.
19. Applicable
Law. This Agreement
shall be governed by and construed in accordance with New York law, without
regard to conflict of laws.
20. Successors and
Assigns. This
Agreement shall be binding upon the Corporation and its successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and signed as of the day and year first above written.
| TAYCO DEVELOPMENTS, INC.
| |
| By: /s/Xxxxxxx X.
Xxxxxx
Xxxxxxx X. Xxxxxx, President | |
| INDEMNITEE | |
| By: _______________________
[Name] |
