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EXHIBIT 10.6
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made effective as of the _____ day of
__________, 1997, by and between PRIMERA FOODS CORPORATION, a Delaware
corporation (the "Company"), and ___________________________ ("Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors the most capable persons available;
WHEREAS, Indemnitee has recently become, or continues to serve as, a
director of the Company;
WHEREAS, the Bylaws of the Company require the Company to indemnify its
directors to the full extent permitted by law and Indemnitee is serving as a
director of the Company, in part, in reliance on such Bylaws; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to maintain Indemnitee's continued service
to the Company in an effective manner and Indemnitee's reliance on the
aforesaid Bylaws and, in part, to provide Indemnitee with specific contractual
assurance that the protection promised by such Bylaws will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation
of such Bylaws or any change in the composition of the Company's Board of
Directors or any acquisition transaction relating to the Company), the Company
desires to provide in this Agreement for the indemnification of and the advance
of expenses to Indemnitee to the full extent (whether partial or complete)
permitted by law, as set forth in this Agreement and, to the extent officers'
and directors' liability insurance is maintained by the Company, to provide for
the continued coverage of Indemnitee under the Company's officers' and
directors' liability insurance policies;
NOW, THEREFORE, in consideration of the covenants contained herein and
of Indemnitee's continuing service to the Company directly or, at its request,
other enterprises, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. CERTAIN DEFINITIONS.
(a) CHANGE IN CONTROL. A Change in Control shall be deemed to
have occurred if (i) any "person" (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended),
other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 20%
or more of the total voting power represented by the Company's then
outstanding Voting Securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the
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Company, and any new director whose election by the Board of Directors
or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in
office who either were (x) directors at the beginning of the period or
(y) whose election or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a
majority of the Board of Directors, or (iii) the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in
the Voting Securities of the Company outstanding immediately prior to
such a merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 80% of the total voting power
represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company (in one transaction or a series of transactions) of all or
substantially all of the Company's assets. A "Change of Control" shall
not be deemed to occur as a result of transactions in contemplation of
or in connection with the Company's initial public offering of Common
Stock, including without limitation, the election of Class I, Class II
and Class III directors or the issuance of Common Stock to the public
in the offering.
(b) CLAIM. Any threatened, pending, or completed action,
suit, arbitration, alternate dispute resolution mechanism,
investigation, or proceeding, and any appeal thereof, whether civil,
criminal, administrative, or investigative and/or any inquiry or
investigation, whether conducted by the Company or any other party that
Indemnitee in good faith believes might lead to the institution of any
such action.
(c) EXPENSES. Include attorneys' fees and all other costs,
expenses, and obligations, including retainers, court costs, transcript
costs, expert fees, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, and delivery
services fees, paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on
appeal), or preparing to defend, be a witness in or participate in any
claim relating to any Indemnifiable Event.
(d) INDEMNIFIABLE EVENT. Any event, occurrence, or
circumstance related to the fact that Indemnitee is or was a
director, officer, employee, trustee, agent, or fiduciary of the
Company, or is or was serving at the request of the Company as a
director, officer, employee, trustee, agent or fiduciary of any other
corporation, partnership, joint venture, employee benefit plan, trust
or other enterprise, or by reason of anything done or not done by
Indemnitee in any such capacity.
(e) POTENTIAL CHANGE IN CONTROL. Shall be deemed to have
occurred if (i) the Company enters into an agreement or arrangement, the
consummation of which would
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result in the occurrence of a Change in Control; (ii) any person
(including the Company) publicly announces an intention to take or to
consider taking actions which if consummated would constitute a Change
in Control; (iii) any person (other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company acting
in such capacity or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company), who is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's
then outstanding Voting Securities increases his beneficial ownership
of such securities by 5% or more over the percentage so owned by such
person on the date hereof; or (iv) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in
Control has occurred. A "Potential Change of Control" shall not be
deemed to occur as a result of transactions in contemplation of or in
connection with the Company's initial public offering of Common Stock,
including without limitation, the election of Class I, Class II and
Class III directors or the issuance of Common Stock to the public in
the offering.
(f) REVIEWING PARTY. Any appropriate person or body
consisting of a member or members of the Company's Board of Directors
including the Special Independent Counsel referred to in Section 4 (or,
to the fullest extent permitted by law, any other person or body
appointed by the Board), who is not a party to the particular claim for
which Indemnitee is seeking indemnification.
(g) VOTING SECURITIES. Any securities of the Company which
vote generally in the election of directors.
2. AGREEMENT TO SERVE. Indemnitee agrees to continue to serve as a
director of the Company. Indemnitee may at any time and for any reason resign
from such position (subject to any other contractual obligation or any
obligation imposed by operation of law). The Company shall have no obligation
under this Agreement to continue Indemnitee in any position with the Company.
3. BASIC INDEMNIFICATION AGREEMENT.
(a) 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, a Claim by reason of (or airing in
party out of), an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law, as soon as
practicable but in any event no later than thirty days after written
demand is presented to the Company against any and all expenses,
judgments, fines, penalties, and amounts paid in settlement (including
all interest, assessments, and other charges paid or payable in
connection with or in respect of such expenses, judgments, fines,
penalties, or amounts paid in settlement) of such Claim.
Notwithstanding anything in this Agreement to the contrary, 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 Company or any director
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or officer of the Company unless the Company has joined in or consented
to the initiation of such Claim. If so requested by Indemnitee, the
Company shall advance (within two business days of such request) any
and all Expenses to Indemnitee (an "Expense Advance").
(b) Notwithstanding the foregoing, (i) the obligations of
the Company under Section 3(a) shall be subject to the condition
that any Reviewing Party shall not have determined in a written opinion
(in any case in which the Special Independent Counsel referred to in
Section 4 hereof is involved) that Indemnitee would not be permitted to
be indemnified under applicable law, and (ii) the obligation of the
Company to make an Expense Advance pursuant to Section 3(a) shall be
subject to the condition that if, when and to the extent that any
Reviewing Party determines that Indemnitee would not be permitted to be
so indemnified under applicable law, the Company shall be entitled to
be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company, without interest) for all such amounts theretofore paid;
provided, however, that if Indemnitee has commenced legal proceedings
in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any
determination made by a Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding
and Indemnitee shall not be required to reimburse the Company for any
Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). If there has not been a Change in Control, a
Reviewing Party shall be selected by the Board of Directors, and if
there has been such a Change in Control, a Reviewing Party shall be the
Special Independent Counsel referred to in Section 4 hereof. If there
has been no appointment or no determination by a Reviewing Party or if
a Reviewing Party determines that Indemnitee substantively would not be
permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any court in
the States of Wisconsin or Delaware having subject matter jurisdiction
thereof and in which venue is proper seeking an initial determination
by the court or challenging any such determination by the court or
challenging any such determination by the Reviewing Party or any aspect
thereof, including the legal or factual basis therefor, and the Company
hereby (i) consents to service of process and to appear in any such
proceeding, (ii) shall be precluded from asserting that the procedures
and presumptions of this Agreement are not valid, binding, and
enforceable, and (iii) shall stipulate in any such proceeding that the
Company is bound by all the provisions of this Agreement. Any
determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and Indemnitee.
4. CHANGE IN CONTROL. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control which
has been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control) then with respect to all
matters thereafter arising concerning the rights of Indemnitee to indemnity
payment and Expense Advances under this Agreement or any other agreement, the
Company's Certificate of Incorporation, or the Company's Bylaws now or
hereafter in effect relating to Claims for Indemnifiable Events, the Company
shall seek legal advice only from "Special Independent
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Counsel" selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld), and who has not otherwise performed
services for the Company or Indemnitee within the last five years (other than
in connection with such matters). Such Special Independent Counsel, among
other things, shall render its written opinion to the Company and Indemnitee as
to whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the reasonable
fees of the Special Independent Counsel referred to above and may fully
indemnify such Special Independent Counsel against any and all expenses
(including attorney's fees), claims, liabilities, and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
5. ESTABLISHMENT OF TRUST. In the event of Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a
"Trust" for the benefit of Indemnitee and from time to time upon written
request of Indemnitee shall fund such Trust in an amount sufficient to satisfy
any and all Expenses reasonably anticipated at the time of each such request to
be incurred in connection with investigating, preparing for and defending any
Claim relating to an Indemnifiable Event, and any and all judgments, fines,
penalties, and settlement amounts of any and all Claims relating to an
Indemnifiable Event from time to time actually paid or claimed, reasonably
anticipated or proposed to be paid. The amount or amounts to be deposited in
the Trust pursuant to the foregoing funding obligation shall be determined by a
Reviewing Party, in any case in which the Special Independent Counsel referred
to above is involved. The Terms of the Trust shall provide that upon a Change
in Control (i) the Trust shall not be revoked or the principal thereof invaded,
without the written consent of the Indemnitee, (ii) the Trustee shall advance,
within two business days of a request by the Indemnitee, any and all Expenses
to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust
under the circumstances under which the Indemnitee would be required to
reimburse the Company under Section 3(b) of this Agreement, (iii) the Trust
shall continue to be funded by the Company in accordance with the funding
obligation set forth above, (iv) the Trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (v) all unexpended
funds in such Trust shall revert to the Company upon a final determination by
the Reviewing Party or a court of competent jurisdiction, as the case may be,
that the Indemnitee has been fully indemnified under the terms of this
Agreement. The Trustee shall be a bank or trust company or other individual or
entity chosen by the Indemnitee and acceptable and approved by the Company.
Nothing in this Section 5 shall relieve the Company of any of its obligations
under this Agreement.
6. INDEMNIFICATION FOR ADDITIONAL EXPENSES. To the fullest extent
permitted by law, the Company shall indemnify against any and all Expenses
(including attorney's fees) and, if requested by Indemnitee, shall (within two
business days of such request) advance 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 Company under this Agreement or any other agreement, the Company's Bylaws,
or Certificate of Incorporation hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company,
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regardless of whether Indemnitee ultimately is determined to be entitled to
such indemnification, Expense advance or insurance recovery, as the case may
be.
7. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or
a portion of the expenses, judgments, fines, penalties, and amounts paid in
settlement of a claim but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any other provision of
this Agreement, all Claims relating in whole or in part to any Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
8. CONTRIBUTION. If the indemnification provided in this
Agreement is unavailable and may not be paid to Indemnitee because such
indemnification is not permitted by law, then in respect of any threatened,
pending, or completed Claim in which the Company is jointly liable with
Indemnitee (or would be if joined in such Claim), the Company shall contribute,
to the full extent permitted by law, to the amount of expenses, judgments,
fines, penalties, and amounts paid in settlement (including all interest,
assessments, and other charges paid or payable in connection with or in respect
of such expenses, judgments, fines, penalties, or amounts paid in settlement)
actually incurred and paid or payable by Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company on the
one hand and Indemnitee on the other hand from the transaction from which such
Claim arose, and (ii) the relative fault of the Company on the one hand and
Indemnitee on the other in connection with the events which resulted in such
expenses, judgments, fines, penalties, and amounts paid in settlement, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of Indemnitee on the other shall be determined by
reference to, among other things, the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent the circumstances
resulting in such expenses, judgment, fines, penalties, and amounts paid in
settlement. The Company agrees that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
9. NO PRESUMPTION. For purposes of this Agreement, to the fullest
extent permitted by law, the termination of any Claim, action, suit, or
proceeding, by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.
10. NON-EXCLUSIVITY, ETC. The rights of the Indemnitee hereunder
shall be in addition to any other rights Indemnitee may have under the Company's
Certificate of Incorporation or Bylaws or the Delaware General Corporation Law
or otherwise. To the extent that a change in the
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Delaware General Corporation Law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Company's Certificate of Incorporation or Bylaws or this Agreement,
to the fullest extent permitted by law it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded
by such change immediately upon the occurrence of such change without further
action by the Company or Indemnitee.
11. LIABILITY INSURANCE. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any director or officer of the Company. The Board of Directors
of the Company shall determine the amount and coverage of such directors' and
officers' liability insurance from time to time.
12. PERIOD OF LIMITATIONS. No legal action shall be brought and
no cause of action shall be asserted by or in the right of the Company
or any affiliate of the Company against Indemnitee, Indemnitee's spouse, heirs,
executors or personal or legal representatives after the expiration of two
years from the date of accrual of such cause of action, and any claim or cause
of action of the Company or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such
two-year period; provided, however, that if any shorter period of limitations
is otherwise applicable to any such cause of action such shorter period shall
govern.
13. AMENDMENTS, ETC.. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
14. SUBROGATION. 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 Indemnitee, 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.
15. NO DUPLICATION OF PAYMENTS. The Company shall not be liable
under this Agreement to make any payment in connection with any Claim made
against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, Bylaws, or otherwise) of the amounts
otherwise indemnifiable hereunder.
16. BINDING EFFECT, ETC.. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successors by
purchase, merger, consolidation, or otherwise to all or substantially all of
the business and/or assets of the Company, spouses, heirs, and personal and
legal representatives. The Company shall require and cause any successor
(whether direct or
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indirect by purchase, merger, consolidation, or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as an officer or director
of the Company or of any other enterprise at the Company's requests.
17. SEVERABILITY. The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph, or sentence) are held by a court
of competent jurisdiction to be invalid, void, or otherwise unenforceable in
any respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way
impaired, and shall remain enforceable to the fullest extent permitted by law.
18. TERM. All obligations of the Company contained herein shall
continue during the period Indemnitee serves the Company in a capacity referred
to in Section 2 hereof, and shall continue thereafter so long as Indemnitee
shall be subject to any possible Claim relating to an Indemnifiable Event.
19. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such State without giving
effects to the principles of conflicts of law.
IN WITNESS WHEREOF, the undersigned have hereunto affixed their
signatures.
PRIMERA FOODS CORPORATION
By:
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Xxx X. Xxxxxxx, Chief Executive Officer
INDEMNITEE
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