EXHIBIT 10.6
DIRECTOR INDEMNITY AGREEMENT
THIS AGREEMENT is made as of ______________ 2003, by and between
Xxxxxxxxxxx Industries, Inc., an Indiana corporation (the "Corporation"), and
__________________ (the "Director") residing at _____________________________.
WHEREAS, the Corporation is aware that competent and experienced
persons are increasingly reluctant to serve as directors of corporations unless
they are protected by director liability insurance and/or indemnification, due
to the increasing amount of litigation against directors and the increasing
expense of defending such claims, and due to the fact that the exposure
frequently bears no reasonable relationship to the compensation of such
directors; and
WHEREAS, it is essential to the Corporation to retain and attract as
directors the most capable and qualified persons available; and
WHEREAS, it is now and has been the express policy of the Corporation
to indemnify its directors so as to provide them with the maximum possible
protection permitted by law; and
WHEREAS, the Corporation's articles of incorporation and the Indiana
Business Corporation Law, by their nonexclusive nature, permit contracts between
the Corporation and its directors with respect to indemnification of directors.
NOW, THEREFORE, the Corporation and the Director agree as follows:
1. DEFINITIONS. As used in this Agreement:
(a) "expenses" includes all direct and indirect costs of any type
or nature whatsoever (including, without limitation, all attorneys' fees and
related disbursements and other out-of-pocket costs) actually and reasonably
incurred by the Director in connection with the investigation, defense,
settlement or appeal of a proceeding or establishing or enforcing a right to
indemnification or advancement of expenses under this Agreement; provided,
however, that expenses shall not include any judgments, fines, ERISA excise
taxes or penalties or amounts paid in settlement of a proceeding.
(b) "proceeding" includes, without limitation, any threatened,
pending, or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding,
whether civil,
criminal, administrative, or investigative and whether formal or informal,
whether by a third party or by or in the right of the Corporation, by reason of
the fact that the Director is or was a director of the Corporation or, while a
director of the Corporation, is or was serving at the request of the Corporation
as a director, officer, partner, member, manager, trustee, employee, fiduciary,
or agent of another foreign or domestic corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan, or other
enterprise, or an affiliate of the Corporation, whether for profit or not.
2. INDEMNITY. The Corporation shall indemnify the Director in
accordance with the provisions of this Section 2 if the Director is a party to
or threatened to be made a party to any proceeding against all expenses,
judgments, fines (including any excise tax or penalty assessed with respect to
any employee benefit plan) and amounts paid in settlement actually and
reasonably incurred by the Director in connection with such proceeding, but only
(a) if the Director acted in good faith, and (b) (i) in the case of conduct in
the Director's official capacity with the Corporation, if the Director acted in
a manner which the Director reasonably believed to be in the best interests of
the Corporation, or (ii) in the case of conduct other than in the Director's
official capacity with the Corporation, if the Director acted in a manner which
the Director reasonably believed was at least not opposed to the best interests
of the Corporation, and (c) in the case of a criminal proceeding, the Director
had reasonable cause to believe that the Director's conduct was lawful or had no
reasonable cause to believe that the Director's conduct was unlawful, and (d) if
required by the Indiana Business Corporation Law, as amended or as may be
amended, revised or superseded (the "Act"), the Corporation makes a
determination that indemnification of the Director is permissible because the
Director has met the standard of conduct as set forth in the Act.
3. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding any other provisions of this Agreement, to the extent that the
Director has been wholly successful, on the merits or otherwise, in the defense
of any proceeding or in defense of any claim, issue or matter therein, including
the dismissal of an action without prejudice, the Corporation shall indemnify
the Director against all expenses incurred in connection therewith.
4. ADDITIONAL INDEMNIFICATION. Notwithstanding any limitation in
Sections 2 or 3, the Corporation shall indemnify the Director to the full extent
authorized or permitted by any amendments to or replacements of the Act adopted
after the date of this Agreement that increase the extent to which a corporation
may indemnify its directors if the Director is a party to or threatened to be
made a party to any proceeding against all expenses, judgments, fines (including
any excise tax or penalty assessed with respect to any employee benefit plan)
and amounts paid in settlement actually and reasonably incurred by the Director
in connection with such proceeding.
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5. EXCLUSIONS. Notwithstanding any provision in this Agreement,
the Corporation shall not be obligated under this Agreement to make any
indemnity or advance expenses in connection with any claim made against the
Director:
(a) for which payment has actually been made to or on behalf of
the Director under any insurance policy or other indemnity provision, except
with respect to any excess beyond the amount paid under such insurance or other
indemnity provision;
(b) for any transaction from which the Director derived an
improper personal benefit;
(c) for recovery of profits resulting from the purchase and sale
or sale and purchase by the Director of securities of the Corporation in
violation of Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any federal, state or local statutory law or
common law;
(d) if a court having jurisdiction in the matter shall finally
determine that such indemnification is not lawful under any applicable statute
or public policy (in this respect, if applicable, both the Corporation and the
Director have been advised that the Securities and Exchange Commission takes the
position that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore, unenforceable and
that claims for indemnification should be submitted to appropriate courts for
adjudication); or
(e) in connection with any proceeding (or part thereof) initiated
by the Director against the Corporation or its directors, officers or employees,
unless (i) such indemnification is expressly required to be made by law, (ii)
the proceeding was authorized by the Board of Directors of the Corporation,
(iii) such indemnification is provided by the Corporation, in its sole
discretion, pursuant to the powers vested in the Corporation under applicable
law, or (iv) the proceeding is initiated pursuant to Section 8 hereof and the
Director is successful in whole or in part in such proceeding.
6. ADVANCEMENT OF EXPENSES. The expenses incurred by the Director
in any proceeding shall be paid promptly by the Corporation upon demand and in
advance of final disposition of the proceeding at the written request of the
Director, if (a) the Director furnishes the Corporation with a written
affirmation of the Director's good faith belief that the Director has met the
standard of conduct required by the Act or this Agreement, (b) the Director
furnishes the Corporation with a written undertaking to repay such advance to
the extent that it is ultimately determined that the Director did not meet the
standard of conduct that would entitle the Director to indemnification, and (c)
if required by the Act, the Corporation makes a determination that the facts
known to those making the determination would not preclude indemnification
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under the Act. Such advances shall be made without regard to the Director's
ability to repay such expenses.
7. NOTIFICATION AND DEFENSE OF CLAIM. As soon as practicable
after receipt by the Director of notice of the commencement of any proceeding,
the Director will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof; provided, however, that the omission so to notify the Corporation will
not relieve the Corporation from any liability which it may have to the Director
otherwise than under this Agreement. With respect to any such proceeding as to
which the Director notifies the Corporation of the commencement thereof:
(a) The Corporation will be entitled to participate therein at its
own expense.
(b) Except as otherwise provided below, the Corporation may, at
its option and jointly with any other indemnifying party similarly notified and
electing to assume such defense, assume the defense thereof, with legal counsel
reasonably satisfactory to the Director. The Director shall have the right to
employ separate counsel in such proceeding, but the Corporation shall not be
liable to the Director under this Agreement, including Section 6 hereof, for the
fees and expenses of such counsel incurred after notice from the Corporation of
its assumption of the defense, unless (i) the Director reasonably concludes that
there may be a conflict of interest between the Corporation and the Director in
the conduct of the defense of such proceeding or (ii) the Corporation does not
employ counsel to assume the defense of such proceeding. The Corporation shall
not be entitled to assume the defense of any proceeding brought by the
Corporation or as to which the Director shall have made the conclusion provided
for in (i) above.
(c) If two or more persons who may be entitled to indemnification
from the Corporation, including the Director, are parties to any proceeding, the
Corporation may require the Director to engage the same legal counsel as the
other parties. The Director shall have the right to employ separate legal
counsel in such proceeding, but the Corporation shall not be liable to the
Director under this Agreement, including Section 6 hereof, for the fees and
expenses of such counsel incurred after notice from the Corporation of the
requirement to engage the same counsel as other parties, unless the Director
reasonably concludes that there may be a conflict of interest between the
Director and any of the other parties required by the Corporation to be
represented by the same legal counsel.
(d) The Corporation shall not be liable to indemnify the Director
under this Agreement for any amounts paid in settlement of any proceeding
effected without its written consent in advance which consent shall not be
unreasonably withheld. The Corporation shall be permitted to settle any
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proceeding the defense of which it assumes, except the Corporation shall not
settle any action or claim in any manner which would impose any penalty or
limitation on the Director without the Director's written consent, which consent
shall not be unreasonably withheld.
8. ENFORCEMENT. Any right to indemnification or advances granted
by this Agreement to the Director shall be enforceable by or on behalf of the
Director in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within 90 days of a written request therefor.
The Director, in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting the claim. Neither
the failure of the Corporation (including its Board of Directors or its
shareholders) to make a determination prior to the commencement of such
enforcement action that indemnification of the Director is proper in the
circumstances, nor an actual determination by the Corporation (including its
Board of Directors or its shareholders) that such indemnification is improper,
shall be a defense to the action or create a presumption that the Director is
not entitled to indemnification under this Agreement or otherwise. The
termination of any proceeding by judgment, order of court, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that the Director is not entitled to
indemnification under this Agreement or otherwise.
9. PARTIAL INDEMNIFICATION. If the Director is entitled under any
provisions of this Agreement to indemnification by the Corporation for some or a
portion of the expenses, judgments, fines (including any excise tax or penalty
assessed with respect to any employee benefit plan) and amounts paid in
settlement actually and reasonably incurred by the Director in the
investigation, defense, appeal or settlement of any proceeding but not, however,
for the total amount thereof, the Corporation shall indemnify the Director for
the portion of such expenses, judgments, fines (including any excise tax or
penalty assessed with respect to any employee benefit plan) and amounts paid in
settlement to which the Director is entitled.
10. TERM. The term of this Agreement shall begin on the date first
written above and shall terminate at such time as the Director no longer serves
as a director of the Corporation, subject to the survival of rights of
indemnification set forth in paragraph 11 below.
11. NONEXCLUSIVITY; SURVIVAL; SUCCESSORS AND ASSIGNS. The
indemnification and advance payment of expenses as provided by this Agreement
shall not be deemed exclusive of any other rights to which the Director may be
entitled under the Corporation's articles of incorporation, the by-laws, any
other agreement, any vote of shareholders or disinterested directors, the Act,
or otherwise, both as to action in the Director's official
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capacity and as to action in another capacity while holding such office. The
right of the Director to indemnification under this Agreement shall vest at the
time of occurrence or performance of any event, act or omission or any alleged
event, act or omission giving rise to any action, suit or proceeding and, once
vested, shall survive any actual or purported termination of this Agreement by
the Corporation or its successors or assigns whether by operation of law or
otherwise and shall survive termination of the Director's services to the
Corporation and shall inure to the benefit of the heirs, personal
representatives and estate of the Director. This Agreement shall be binding, and
the Corporation shall take such action to ensure that it is 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, consolidation, or
operation of law.
12. SEVERABILITY. If this Agreement or any portion thereof is
invalidated on any ground by any court of competent jurisdiction, the
Corporation shall indemnify the Director as to expenses, judgments, fines
(including any excise tax or penalty assessed with respect to any employee
benefit plan) and amounts paid in settlement with respect to any proceeding to
the full extent permitted by any applicable portion of this Agreement that is
not invalidated or by any other applicable law.
13. 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 the Director, who shall execute all documents required and
shall do all acts necessary or desirable to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.
14. MODIFICATION AND WAIVER. 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 constitute a waiver of any other provisions hereof (whether or nor
similar) nor shall such waiver constitute a continuing waiver.
15. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (i) if delivered by hand and receipted for by the party to whom such
notice or other communication shall have been directed, at the time of such
delivery, or (ii) if mailed by certified or registered mail, return receipt
requested, with postage prepaid, three (3) business days after deposit into the
United States mail if to an address in the United States, or if delivered by
recognized overnight courier three (3) business days after receipt by such
courier if to an address outside the United States:
(a) If to the Director, at the address indicated above.
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(b) If to the Corporation, to:
Xxxxxxxxxxx Industries, Inc.
000 Xxxxx Xxxxx 00 Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
or to such other address as may have been furnished to either party by the other
party.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which shall together constitute one agreement.
17. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana, without giving
effect to conflicts of laws principles requiring application of the substantive
laws of another jurisdiction.
18. SCOPE OF AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto for the purposes herein contained, and this
Agreement shall supercede any other agreements, understandings, representations,
or warranties, oral or written, relating to the subject matter of this
Agreement, which shall be deemed to exist or to bind any of the parties hereto
or their respective successors or assigns, except as expressly referred to
herein.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first written above.
XXXXXXXXXXX INDUSTRIES, INC. DIRECTOR
By: _________________________ _________________________________
Xxxxxxx xx Xxxxxxxxx,
Vice President, General
Counsel and Secretary
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