INDEMNIFICATION AGREEMENT
This Agreement (the "Agreement") is made as of this 21st day of July,
1998, by and between Cavalier Homes, Inc., a Delaware corporation (the
"Company"), and ________________________ ("Indemnitee").
W I T N E S S E T H:
WHEREAS, it is essential to the Company and its stockholders
to attract and retain qualified and capable directors and officers; and
WHEREAS, Indemnitee is unwilling to serve, or continue, in
Indemnitee's present capacity without assurances that adequate
liability insurance, indemnification or a combination thereof is, and
will continue to be, provided; and
WHEREAS, the Amended and Restated By-laws of the Company (the
"Bylaws") require the Company to indemnify its directors and officers
and allows the Company to indemnify employees; and
WHEREAS, the Company, in order to induce Indemnitee to
continue to serve the Company, has agreed to provide Indemnitee with
the benefits contemplated by this Agreement; and
WHEREAS, as a result of the provision of such benefits,
Indemnitee has agreed to serve or continue to serve the Company;
NOW, THEREFORE, in consideration of the promises, conditions,
representations and warranties set forth herein, including the
Indemnitee's continued service to the Company, the adequacy and
sufficiency of which are hereby acknowledged, the Company and
Indemnitee hereby agree as follows:
1. Definitions. The following terms, as used herein, have the
following respective meanings:
(a) The "Act" means the Securities Exchange Act of 1934,
as amended.
(b) An "Affiliate" of a specified Person is a Person who
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified.
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(c) The term "Associate", when used to indicate a relationship
with any Person, means (i) any corporation or organization (other than the
Company or a Subsidiary) of which such Person is an officer, director or partner
or is, directly, or indirectly, the Beneficial Owner of ten percent (10%) or
more of any class of Equity Securities, (ii) any trust or other estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity (other than an Employee
Plan Fiduciary), (iii) any Relative of such Person, or (iv) any officer or
director of any corporation controlling or controlled by such Person.
(d) "Beneficial Ownership" shall be determined, and a Person
shall be the Beneficial Owner of all securities which such Person is deemed to
own beneficially, pursuant to Rule 13d-3 (or any successor rule or statutory
provision), or, if Rule 13d-3 shall be rescinded and there shall be no successor
rule or statutory provision thereto, pursuant to Rule 13d-3 as in effect on the
date hereof; provided, however, that a Person shall, in any event, also be
deemed to be the Beneficial Owner of any Voting Share: (a) of which such Person
or any of its Affiliates or Associates is, directly or indirectly, the
Beneficial Owner, or (b) of which such Person or any of its Affiliates or
Associates has (i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange
rights, warrants, or options, or otherwise, or (ii) sole or shared voting or
investment power with respect thereto pursuant to any agreement, arrangement,
understanding, relationship or otherwise (but shall not be deemed to be the
Beneficial Owner of any Voting Shares solely by reason of a revocable proxy
granted for a particular meeting of stockholders, pursuant to a public
solicitation of proxies for such meeting, with respect to shares of which
neither such Person nor any such Affiliate or Associate is otherwise deemed the
Beneficial Owner), or (c) of which any other Person is, directly or indirectly,
the Beneficial Owner if such first mentioned Person or any of its Affiliates or
Associates acts with such other Person as a partnership, syndicate or other
group pursuant to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of capital stock of the
Company; and provided further, however, that (i) no director or officer of the
Company, nor any Associate or Affiliate of any such director or officer, shall,
solely by reason of any or all of such directors and officers acting in their
capacities as such, be deemed for any purposes hereof to be the Beneficial Owner
of any Voting Shares of which any other such director or officer (or any
Associate or Affiliate thereof) is the Beneficial Owner and (ii) no Employee
Plan Fiduciary or any Associate or Affiliate of any such Employee Plan
Fiduciary, shall, solely by reason of being an Employee Plan Fiduciary or
Associate or Affiliate of an Employee Plan Fiduciary, be deemed for any purposes
hereof to be the Beneficial Owner of any Voting Shares held by or under any such
plan.
(e) The "Board of Directors" means the Board of Directors of
the Company.
(f) A "Change in Control" shall be deemed to have occurred if
(i) any Person (other than (A) the Company or any
Subsidiary, (B) any pension, profit sharing, employee stock ownership
or other employee benefit plan of the Company or any Subsidiary or any
trustee of or fiduciary with respect to any such plan when acting in
such capacity, or (C) any Person who is as of the date and time of this
Agreement the Beneficial Owner of twenty percent (20%) or more of the
total voting power of the Voting Shares) becomes, after the date of
this Agreement,
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the Beneficial Owner of twenty percent (20%) or more, but no greater
than fifty percent (50%), of the total voting power of the Voting
Shares, unless prior thereto the Continuing Directors approve the
transaction that results in such Person becoming the Beneficial Owner
of twenty percent (20%) or more, but no greater than fifty percent
(50%), of the total voting power of the Voting Shares;
(ii) any Person (other than (A) the Company or any
Subsidiary, (B) any pension, profit sharing, employee stock ownership
or other employee benefit plan of the Company or any Subsidiary or any
trustee of or fiduciary with respect to any such plan when acting in
such capacity, or (C) any Person who is as of the date and time of this
Agreement the Beneficial Owner of twenty percent (20%) or more of the
total voting power of the Voting Shares) is or becomes, after the date
of this Agreement, the Beneficial Owner of more than fifty percent
(50%) of the total voting power of the Voting Shares, regardless of the
whether the transaction or event by which the fifty percent (50%) level
is exceeded is approved by the Continuing Directors;
(iii) At any time Continuing Directors no longer
constitute a majority of the Board of Directors of the Company; or
(iv) The consummation of (A) a merger or
consolidation of the Company, statutory share exchange, or other
similar transaction (other than such a transaction that is solely for
the purpose of changing the domicile of the Company) with another
corporation, partnership, or other entity or enterprise in which either
the Company is not the surviving or continuing corporation or shares of
common stock of the Company are to be converted into or exchanged for
cash, securities other than common stock of the Company, or other
property, (B) a sale or disposition of all or substantially all of the
assets of the Company, or (C) the dissolution of the Company.
(g) "Claim" means any threatened, pending or completed action,
suit, arbitration or proceeding against or directed at Indemnitee whether
brought by or in the right of the Company or otherwise, or any inquiry or
investigation against or directed at Indemnitee that Indemnitee in good faith
believes might lead to the institution of any such action, suit, arbitration or
proceeding, whether civil, criminal, administrative, investigative or other, or
any appeal therefrom.
(h) "Continuing Directors" means directors (i) who were
directors of the Company at the beginning of the 24-month period ending on the
date the determination is made (the "Period"), or (ii) whose election, or
nomination for election, by the Company's stockholders was approved by (A) at
least a majority of the directors who are in office at the time of the election
or nomination and who either (i) were directors at the beginning of the Period,
or (ii) were elected, or nominated for election, by a at least a majority of the
directors who were in office at the time of the election or nomination and were
directors at the beginning of the Period, or (B) a committee of the Board of
Directors elected or approved by at least a majority of the directors who are in
office at the time of the election or approval of such committee and who either
(i) were directors at the beginning of the Period, or (ii) were elected, or
nominated for election, by at least a majority of the directors
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who were in office at the time of such election or nomination and were directors
at the beginning of the Period.
(i) "D & O Insurance" means any valid directors' and officers'
liability insurance policy maintained by the Company for the benefit of the
Indemnitee, if any.
(j) "Determination" means a determination, and "Determined"
means a matter which has been determined based on the facts known at the time,
by: (i) a majority vote of a quorum of Disinterested Directors, or (ii) if such
quorum is not obtainable, or even if obtainable, if a quorum of Disinterested
Directors so directs, by Independent Legal Counsel in a written opinion
addressed to the Company and Indemnitee, or in the event there has been a Change
in Control, by (A) Special Independent Counsel (in a written opinion addressed
to the Company and Indemnitee) selected by Indemnitee as set forth in Section 6,
or (B) a majority vote of a quorum of Disinterested Directors of the Board of
Directors of the Company or of the ultimate parent entity of the Company or
Independent Legal Counsel as set forth in Section 6, or (iii) a majority of the
Disinterested Stockholders of the Company, or (iv) a final adjudication by a
court of competent jurisdiction.
(k) "Disinterested Director" means a director of the Company
(or, if applicable, the ultimate parent entity of the Company) who is not and
was not a party to the Claim giving rise to the subject matter of a
Determination.
(l) "Disinterested Stockholder" means a stockholder of the
Company who is not and was not a party to the Claim giving rise to the subject
matter of a Determination.
(m) An "Employee Plan Fiduciary" means a Person who serves in
a fiduciary capacity with respect to an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended)
of the Company or any Subsidiary.
(n) "Equity Security" has the meaning given to such term under
Rule 3a11-1 of the General Rules and Regulations under the Act.
(o) "Excluded Claim" means any payment for Losses and Expenses
in connection with any Claim: (i) based upon or attributable to Indemnitee
gaining in fact any personal profit or advantage to which Indemnitee is not
entitled; or (ii) for the return by Indemnitee of any remuneration paid to
Indemnitee without the previous approval of the stockholders of the Company
which is illegal; or (iii) for an accounting of profits in fact made from the
purchase or sale by Indemnitee of securities of the Company within the meaning
of Section 16 of the Act; or (iv) resulting from Indemnitee's fraudulent,
deliberately dishonest or willful misconduct, conduct in bad faith or a knowing
violation of law (including criminal law); or (v) the payment of which by the
Company under this Agreement is not permitted by applicable law; or (vi) based
upon or attributable to an intentional infliction of harm on the Company or its
stockholders; or (vii) based upon any violation of Section 174 of the State
Corporation Law, as amended.
(p) "Expenses" means any reasonable expenses incurred by
Indemnitee as a result of a Claim or Claims made against Indemnitee for
Indemnifiable Events, including, without limitation, reasonable attorneys fees
and all other reasonable costs, expenses and obligations paid
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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.
(q) "Fines" means any fine, penalty or, with respect to an
employee benefit plan, any excise tax or penalty assessed with respect thereto.
(r) "Indemnifiable Event" means any event or occurrence,
occurring prior to or after the date of this Agreement, 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, committee member, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, or by reason of anything done or not done by Indemnitee,
including, but not limited to, any breach of duty, neglect, error, misstatement,
misleading statement, omission, or other act done or wrongfully attempted by
Indemnitee, or any of the foregoing alleged by any claimant, in any such
capacity.
(s) "Independent Legal Counsel" means a law firm or a member
of a law firm that (i) neither is nor in the past five years has been retained
to represent any material matter by the Company, any Subsidiary, Indemnitee or
any other party to the Claim, (ii) under applicable standards of professional
conduct then prevailing would not have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee"s rights
to indemnification under this Agreement, and (iii) is reasonably acceptable to
the Company and Indemnitee.
(t) "Losses" means any amounts or sums which Indemnitee is
legally obligated to pay as a result of a Claim or Claims made against
Indemnitee for Indemnifiable Events including, without limitation, damages,
attorneys' fees, judgments and sums or amounts paid in settlement of a Claim or
Claims, and Fines.
(u) "Person" means any individual, partnership, corporation,
limited liability partnership, limited liability corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.
(v) "Relative" means a Person's spouse, parents, children,
siblings, mothers- and fathers-in-law, sons- and daughters-in-law and brothers-
and sisters-in-law.
(w) "Reviewing Party" means any appropriate person or body
consisting of a member or members of the Company's Board of Directors or any
other person or body appointed by the Board (including Independent Legal Counsel
and Special Independent Counsel) who is not a party to the particular Claim for
which Indemnitee is seeking indemnification.
(x) A "Rule" shall refer to a rule of the General Rules and
Regulations under the Act.
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(y) A "Special Independent Counsel" means Independent Legal
Counsel that shall have the authority and responsibility more fully set forth in
Section 6 hereof and shall be compensated by the Company as more fully set forth
in said section.
(z) The "State Corporation Law" means the General Corporation
Law of the State of Delaware.
(aa) "Subsidiary" means any corporation of which more than
fifty percent (50%) of any class of Equity Security is owned, directly or
indirectly, by the Company.
(bb) "Voting Shares" means any issued and outstanding shares
of capital stock of the Company entitled to vote generally in the election of
directors.
2. Basic Indemnification Agreement. In consideration of, and as an
inducement to, the Indemnitee rendering valuable services to the Company, the
Company agrees that in the event Indemnitee 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 arising in part out of) an
Indemnifiable Event, the Company shall advance Expenses to and indemnify and
hold Indemnitee harmless to the fullest extent authorized by law, against any
and all Expenses and Losses (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses and
Losses of such Claim), whether or not such Claim proceeds to judgment or is
settled or otherwise is brought to a final disposition, subject in each case, to
the further provisions of this Agreement.
3. Limitations on Indemnification. Notwithstanding the provisions of
Section 2, Indemnitee shall not be indemnified and held harmless from any Losses
or Expenses (a) which have been Determined, as provided herein, to constitute an
Excluded Claim; (b) to the extent Indemnitee is indemnified by the Company and
has actually received payment pursuant to the By-laws, Certificate of
Incorporation, D&O Insurance, or otherwise; or (c) other than pursuant to the
last sentence of Section 4(d) or Section 13, in connection with any Claim
initiated by Indemnitee, unless the Company has joined in or the Board of
Directors has authorized such Claim. Indemnitee shall have the right to appeal
any Determination to a court of competent jurisdiction and if successful shall
be entitled to receive indemnification against or for any Losses and Expenses
incurred in connection with such appeal.
4. Indemnification Procedures
(a) Within ten (10) days after receipt by Indemnitee of notice
of any Claim, Indemnitee shall, if indemnification with respect thereto may be
sought from the Company under this Agreement, notify the Company of the
commencement thereof and shall include in or with the notice such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of
such a notice from Indemnitee, advise the Board of Directors in writing that
Indemnitee has requested indemnification. The foregoing notwithstanding, any
failure by Indemnitee to notify the Company of the commencement of any Claim
will not relieve the Company of any liability that it may have to Indemnitee
hereunder, except
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to the extent that the Company demonstrates that the defense of such action is
prejudiced by Indemnitee's failure to give such notice. Indemnitee agrees
further not to make any admission or effect any settlement with respect to such
Claim without the consent of the Company, except any Claim with respect to which
the Indemnitee has undertaken the defense in accordance with the second to last
sentence of Section 4(d).
(b) If, at the time of the receipt of such notice, the Company
has D&O Insurance in effect, the Company shall give prompt notice of the
commencement of such Claim to the insurers in accordance with the procedures set
forth in the respective policies. The Company shall thereafter use reasonable
efforts to cause such insurers to pay, on behalf of Indemnitee, all Losses and
Expenses payable as a result of such Claim.
(c) To the extent the Company does not, at the time of the
Claim, have applicable D&O Insurance, or if a Determination is made that any
Expenses arising out of such Claim will not be payable under the D&O Insurance
then in effect, or in the event and to the extent that the D&O Insurance then in
effect fails to pay Expenses arising out of such Claim or the insurer fails to
assume the defense of the Claim, the Company shall be obligated to pay the
Expenses of any Claim in advance of the final disposition thereof and the
Company, if appropriate, shall be entitled to assume the defense of such Claim,
with counsel reasonably satisfactory to Indemnitee , upon the delivery to
Indemnitee of written notice of its election so to do. After delivery of such
notice, the Company will not be liable to Indemnitee under this Agreement for
any legal or other Expenses subsequently incurred by the Indemnitee in
connection with such defense other than reasonable Expenses of investigation
incurred by Indemnitee at the request of the Company; provided that Indemnitee
shall have the right to employ his or her own counsel in such Claim but the fees
and expenses of such counsel incurred after delivery of notice from the Company
of its assumption of such defense shall be at the Indemnitee's expense; provided
further that if: (i) the employment of counsel by Indemnitee at the Company's
expense has been previously authorized by the Company; (ii) there is, under
applicable standards of professional conduct, a conflict of interest on any
significant issue between the positions of the Company and Indemnitee in the
conduct of any such defense; or (iii) the Company shall not, in fact, have
employed counsel to assume the defense of such action, the reasonable fees and
expenses of counsel shall be at the expense of the Company; provided, however,
that the Indemnitee together with all other parties being indemnified by the
Company under agreements similar to this Agreement or the Certificate of
Incorporation or By-laws, shall be entitled as a group to retain only one law
firm to represent them in any single action unless there is, under applicable
standards of professional conduct, a conflict on any significant issue between
the positions of any two or more such indemnitees, in which case each indemnitee
with respect to whom such a conflict exists (or group of indemnitees who among
them have no such conflict) may retain one separate law firm. In addition,
Indemnitee shall have the right to appeal any Determination to a court of
competent jurisdiction, and if successful shall be entitled to receive
indemnification against and for Losses and Expenses incurred in connection with
such appeal.
(d) All payments on account of the Company's indemnification
obligations under this Agreement shall be made within sixty (60) days of
Indemnitee's written request therefor (which shall in no event be made prior to
Indemnitee being liable therefor) unless a Determination is made that the Claims
giving rise to Indemnitee's request are Excluded Claims or otherwise not payable
under this Agreement, provided that all payments on account of the Company's
obligation to pay
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Expenses under Section 4(c) of this Agreement prior to the final disposition of
any Claim shall be made within twenty (20) days of Indemnitee's written request
therefor (which shall in no event be made prior to Indemnitee being liable
therefor) and such obligation shall not be subject to any such Determination but
shall be subject to Section 4(e) of this Agreement. In the event the Company
takes the position that the Indemnitee is not entitled to indemnification in
connection with any Claim, the Indemnitee shall have the right at Indemnitee's
own expense to undertake defense of any such Claim, insofar as such proceeding
involves Claims against the Indemnitee, by written notice given to the Company
within ten (10) days after the Company has notified the Indemnitee in writing of
its contention that the Indemnitee is not entitled to indemnification. If it is
subsequently determined in connection with such proceeding that the
Indemnifiable Events are not Excluded Claims and that the Indemnitee, therefore,
is entitled to be indemnified under the provisions of Section 2 hereof, the
Company shall promptly indemnify the Indemnitee.
(e) Indemnitee hereby expressly undertakes and agrees to
reimburse the Company for all Losses and Expenses paid by the Company in
connection with any Claim against Indemnitee in the event and only to the extent
that a determination shall have been made by a court of competent jurisdiction
in a decision from which there is no further right to appeal that Indemnitee is
not entitled to be indemnified by the Company for such Losses and Expenses
because the Claim is an Excluded Claim or because Indemnitee is otherwise not
entitled to payment under this Agreement; and, further, Indemnitee shall pay the
costs and expenses of the Company if it obtains such a determination and such
court further determines that the position of such Indemnitee was not made in
good faith or was frivolous.
(f) Indemnitee agrees to cooperate with any Persons making a
Determination with respect to Indemnitee's entitlement to indemnification under
this Agreement, including providing to such Person upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and is
reasonably necessary to such Determination. Any Expenses incurred by Indemnitee
in so cooperating with the Persons making such Determination shall be borne by
the Company (irrespective of the Determination as to Indemnitee's entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold the
Indemnitee harmless therefrom.
5. Settlement. The Company shall have no obligation to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any Claim
effected without the Company's prior written consent. The Company shall not be
required to obtain the consent of Indemnitee to the settlement of any Claim
which the Company has undertaken to defend if the Company assumes full and sole
responsibility for such settlement and the settlement grants Indemnitee a
complete and unqualified release in respect of the potential liability. Neither
the Company nor Indemnitee shall unreasonably withhold their consent to any
proposed settlement.
6. Change in Control; Extraordinary Transactions. (a) The Company and
Indemnitee agree that if there is a Change of Control of the sort set forth in
clause (i) of Section 1(f), then all Determinations thereafter with respect to
the rights of Indemnitee to be paid Losses and Expenses under this Agreement
shall be made by a majority vote of a quorum of Disinterested Directors of the
Company, or if the Company is a Subsidiary of any other Person, then by a
majority vote of a quorum of Disinterested Directors of the ultimate parent
entity of the Company, or if such
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a quorum is not obtainable, or even if obtainable, if a quorum of Disinterested
Directors of the Company or the ultimate parent entity of the Company so
directs, by Independent Legal Counsel in a written opinion addressed to the
Company and Indemnitee, or, in any such case, by a court of competent
jurisdiction. The Company and Indemnitee agree that if there is a Change in
Control of the Company other than a Change of Control of the sort set forth in
clause (i) of Section 1(f), then all Determinations thereafter with respect to
the rights of Indemnitee to be paid Losses and Expenses under this Agreement
shall be made only by a Special Independent Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld) or
by a court of competent jurisdiction. The Company shall pay the reasonable fees
of such Special Independent Counsel and shall indemnify such Special Independent
Counsel against any and all reasonable expenses (including reasonable attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
(b) The Company covenants and agrees that, in the event of a
Change in Control of the sort set forth in clause (iv) of Section 1(f), the
Company will use all reasonable efforts (i) to have the obligations of the
Company under this Agreement expressly assumed by the surviving, purchasing or
succeeding entity, or (ii) otherwise to adequately provide for the satisfaction
of the Company's obligations under this Agreement, in a manner reasonably
acceptable to the Indemnitee.
7. No Presumption. For purposes of this Agreement, the termination of
any Claim by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not, of itself, 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.
8. Non-exclusivity, Duration, Etc. The rights of the Indemnitee
hereunder shall be in addition to any other rights Indemnitee may have under the
Certificate of Incorporation, the By-laws, the State Corporation Law, any other
agreement, any vote of Disinterested Stockholders or Disinterested Directors or
otherwise, both as to action in the Indemnitee's official capacity and as to
action in any other capacity by holding such office, and the rights and
obligations under this Agreement shall continue in full force and effect after
the Indemnitee ceases to serve the Company as a director, officer, employee,
agent or fiduciary, and for so long as the Indemnitee shall be subject to any
Claim by reason of (or arising in part out of) an Indemnifiable Event and until
all applicable statutes of limitation have expired. To the extent that a change
in the State Corporation Law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently under the
By-laws, Certificate of Incorporation or this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change. In the event that a change in the State
Corporation Law (whether by statute or judicial decision) narrows the right of
the Company to indemnify its directors, officers, employees or fiduciaries, such
change, to the extent not otherwise required by such law, statute or decision to
be applied to this Agreement, shall not affect this Agreement or the parties'
rights and obligations hereunder.
9. Liability Insurance. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee, if an officer or director of the Company, shall be
covered by such policy or policies, in accordance with its or their terms, to
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the maximum extent of the coverage available for any director or officer of the
Company. The Company shall have no obligation to maintain insurance providing
directors' and officers' liability coverage if the Company determines in good
faith that such insurance is not reasonably available or is too expensive, the
premium costs for such insurance are disproportionate to the amount of coverage
provided, or the coverage provided by such insurance is limited by exclusions so
as to provide an insufficient benefit.
10. 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.
11. 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 and Losses 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, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or 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 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.
12. Liability of Company. The Indemnitee agrees that neither the
stockholders nor the directors nor any officer, employee, representative or
agent of the Company shall be personally liable for the satisfaction of the
Company's obligations under this Agreement, and the Indemnitee shall look solely
to the assets of the Company for satisfaction of any claims hereunder.
13. Enforcement.
(a) Indemnitee's right to indemnification and other rights
under this Agreement shall be specifically enforceable by Indemnitee and shall
be enforceable notwithstanding any adverse Determination by the Company's Board
of Directors, Independent Legal Counsel, the Special Independent Counsel or the
Company's stockholders, and no such Determination shall create a presumption
that Indemnitee is not entitled to be indemnified hereunder.
(b) In the event that any action is instituted by Indemnitee
under this Agreement, or to enforce or interpret any of the terms of this
Agreement, to the extent that Indemnitee is the prevailing party Indemnitee
shall be entitled to be paid all court costs and reasonable expenses, including
reasonable counsel fees, incurred by Indemnitee with respect to such action.
14. Severability. In the event that any provision of this Agreement is
determined by a court to require the Company to do or to fail to do an act which
is in violation of applicable law, such provision (including any provision
within a single section, paragraph or sentence) shall be limited
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or modified in its application to the minimum extent necessary to avoid a
violation of law, and, as so limited or modified, such provisions and the
balance of this Agreement shall be enforceable in accordance with their terms to
the fullest extent permitted by law.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State, without reference to the choice
of law provisions of such State.
16. Consent to Jurisdiction. The Company and the Indemnitee each hereby
consent to the non-exclusive jurisdiction of the courts of the State of Alabama
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement may be brought in the state and Federal courts of the State of
Alabama.
17. Notices. All notices or other communications required or permitted
hereunder shall be sufficiently given for all purposes if in writing and
personally delivered, telegraphed, telexed, sent by facsimile transmission sent
by registered or certified mail, return receipt requested, with postage prepaid,
or by nationally recognized overnight courier, addressed as follows, or to such
other address as the parties shall have given notice of pursuant hereto:
(a) If to the Company to:
Cavalier Homes, Inc.
Highway 00 Xxxxx xxx Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Fax: 205/000-0000
Attn: __________________
With a copy to:
(b) If to the Indemnitee, to:
Xx. Xxxxx X. Xxxxxxx
Cavalier Homes, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
X.X. Xxx 0000
Xxxxxxx Xxxxx, XX 00000
Fax: 940/000-0000
18. Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original and all of which, when taken together, shall
constitute one and the same instrument.
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19. Successors and Assigns. This Agreement shall be (i) binding upon
all successors and assigns of the Company, including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, and (ii) binding
upon and inure to the benefit of any successors and assigns, heirs, and personal
or legal representatives of Indemnitee.
20. Amendment; Waiver. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless made in a writing
signed by each 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 provision
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company and Indemnitee have executed
this Agreement as of the day and year first above written.
CAVALIER HOMES, INC.
By:
----------------------------------
Printed Name
Title:
ATTEST:
By:
---------------------------------
Printed Name
Title:
INDEMNITEE
[L.S.]
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