EXHIBIT 10.38
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT (the "Agreement") dated as of
February 25, 1998, between BERLITZ INTERNATIONAL, INC., a New York corporation
(the "Company"), and [ ] (the "Indemnified Party").
WHEREAS, the Indemnified Party is currently serving as a
director of the Company and the Company wishes to indemnify the Indemnified
Party to the fullest extent permitted by the certificate of incorporation of the
Company (the "Certificate of Incorporation"), the by-laws of the Company (the
"By-laws") and the New York Business Corporation Law ("NYBCL"), effective as of
January 1, 1998 (the "Effective Date"), the date on which the indemnified party
was initially elected an executive officer of the Company.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants herein contained, the parties hereto agree as of the effective
date as follows:
1. To the extent not prohibited by law, the Company shall pay
on behalf of the Indemnified Party an indemnification amount representing an
amount which he is or becomes legally obligated to pay, because he is or was
made, or threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding (a "Proceeding"), whether civil, criminal,
administrative or investigative, including, without limitation, an action by or
in the right of the Company to procure a judgment in its favor, by reason of the
fact that the Indemnified Party is or was a director or an officer of the
Company, or is or was serving in any capacity at the request of the Company for
any other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against judgments, fines, penalties, excise taxes, amounts
paid in settlement and costs, charges and expenses (including attorneys' fees
and disbursements). The Indemnified Party serving in any capacity of (a) another
corporation of which a majority of the shares entitled to vote in the election
of its directors is held, directly or indirectly, by the Company or (b) any
employee benefit plan of the Company or any corporation referred to in clause
(a) above shall be deemed to be doing so at the request of the Company.
2. Notwithstanding the foregoing, the Company shall not be
liable under this Agreement to make any payment in connection with any claim
made against the Indemnified Party:
(a) for which the Indemnified Party has received
payment under a valid and collectible insurance policy, except in respect of any
excess beyond the amount of payment under such insurance;
(b) if a judgment or other final adjudication adverse
to the Indemnified Party establishes that he was personally gaining in fact a
financial profit or other advantage to which he was not legally entitled; or
(c) if a judgment or other final adjudication adverse
to the Indemnified Party establishes that his 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.
3. The Company shall reimburse or advance to the Indemnified
Party the funds
necessary for payment of expenses, including attorneys' fees and disbursements,
incurred in connection with any Proceeding, in advance of the final disposition
of such Proceeding; provided, however, that such expenses incurred by or on
behalf of the Indemnified Party may be paid in advance of the final disposition
of a Proceeding only upon receipt by the Company of an undertaking, by or on
behalf of such Indemnified Party, to repay any such amount so advanced if it
shall ultimately be determined by final judicial decision from which there is no
further right of appeal that such Indemnified Party is not entitled to be
indemnified for such expenses.
4. The Company shall pay all claims, or reimburse or advance
all expenses, under this Agreement, within 30 days after a written request
therefor has been received by the Company.
5. 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 the Indemnified Party, who 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 Company effectively to bring
suit to enforce such rights.
6. In the event any Proceeding is brought against the
Indemnified Party, the Indemnified Party shall as soon as practicable notify the
Company in writing of the commencement thereof, and the Company shall be
entitled to participate therein and, to the extent that the Company may wish,
assume the defense thereof and after notice in writing to the Indemnified Party
from the Company of its election to assume the defense thereof, the Company
shall not be liable under this Agreement for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof.
7. The rights to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Agreement
shall be enforceable by the Indemnified Party in any court of competent
jurisdiction. The burden or proving that such indemnification or reimbursement
or advancement of expenses is not appropriate shall be on the Company. Neither
the failure of the Company (including its Board of Directors (the "Board"), its
independent legal counsel and its shareholders) to have made a determination
prior to the commencement of such action that such indemnification or
reimbursement or advancement of expenses is proper in the circumstances nor an
actual determination by the Company (including its Board, its independent legal
counsel and its shareholders) that the Indemnified Party is not entitled to such
indemnification or reimbursement or advancement of expenses shall constitute a
defense to the action or create a presumption that the Indemnified Party is not
so entitled. The Indemnified Party shall also be indemnified for any expenses
incurred in connection with successfully establishing his right to such
indemnification or reimbursement or advancement of expenses, in whole or in
part, in any such Proceeding.
8. The Indemnified Party may elect to have the right to
indemnification or reimbursement or advancement of expenses interpreted on the
basis of the applicable law in effect at the time of the occurrence of the event
or events giving rise to the applicable Proceeding, to the extent permitted by
law, or on the basis of the applicable law in effect at the time such
indemnification or reimbursement or advancement of expenses is sought. Such
election shall be made, by a notice in writing to the Company, at the time
indemnification or reimbursement or advancement of expenses is sought; provided,
however, that if no such notice is given, the right
of indemnification or reimbursement or advancement of expenses shall be
determined by the law in effect at the time indemnification or reimbursement or
advancement of expenses is sought.
9. The rights to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Agreement
shall not be deemed exclusive of any other rights to which the Indemnified Party
may have or hereafter be entitled under any statute, the Certificate of
Incorporation or the By-laws, any other agreement, any vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
10. The Company shall maintain an insurance policy or policies
providing directors' and officers' liability insurance to the extent such
insurance is reasonably available at a reasonable cost.
11. All notices required or permitted to be given pursuant to
this Agreement shall be given in writing, shall be transmitted by personal
delivery, by registered or certified mail, return receipt requested, postage
prepaid, or by telecopier or other electronic means and shall be addressed as
follows:
if to the Company, to:
Berlitz International, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
if to the Indemnified Party, to:
[ ]
c/o Berlitz International, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Either party hereto may designate a new address to which notices required or
permitted to be given pursuant to this Agreement shall thereafter be transmitted
by giving notice to that effect to the other party. Each notice shall be deemed
to have been given, delivered, received and to have become effective for all
purposes at the time it shall have been (a) delivered to the addressee as
indicated by the return receipt (if transmitted by mail or personal delivery),
the affidavit of the messenger (if transmitted by personal delivery) or the
answer back or call back (if transmitted by telecopier or other electronic
means), or (b) presented for delivery to the addressee as so indicated during
normal business hours, if such delivery shall have been refused for any reason.
12. 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 that might indicate the applicability of any
other law.
13. This Agreement shall be binding upon all successors and
assigns of the Company (including any transferee of all or substantially all of
its assets and any successor by merger or operation of law). The rights to
indemnification and reimbursement or advancement of expenses provided by, or
granted pursuant to, this Agreement shall continue as to the Indemnified Party
who has ceased to be an officer of the Company and shall inure to the benefit of
his executors, administrators, legatees and distributees.
14. If any provision or provisions of this Agreement shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify the Indemnified Party to the fullest extent
permitted by all remaining provisions of this Agreement that shall not have been
invalidated, and to the fullest extent permitted by applicable law.
15. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and signed as of the day and year first written
above.
BERLITZ INTERNATIONAL, INC.
By:
Xxxxxxxx Xxxxx
[ ] Vice Chairman,
Chief Executive officer and
President
