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Exhibit 10.35
FORM OF INDEMNIFICATION AGREEMENT
This Agreement is between Rockford Corporation ("Rockford" or "Rockford"), and
_____________, a director of Rockford ("Director"). Rockford and Director agree
as follows:
1 DIRECTOR'S POSITION. Director is a director of Rockford. Rockford wants
Director to serve as a director and Director will serve if Director is
indemnified as provided in this Agreement.
2 BEST JUDGMENT. Rockford desires that Director be free in serving Rockford
to exercise Director's best judgment, without undue concern for litigation
or claims for damages arising out of or related to the performance of
Director's duties.
3 INDEMNIFICATION. Rockford indemnifies Director against, and will pay on
behalf of Director, Losses in any Proceeding brought as a result of
Director serving as a director of Rockford or as an officer or director of
another corporation at Rockford's request. Rockford will indemnify Director
to the full extent authorized or permitted by the State Statute. For
purposes of this Agreement:
3.1 "Losses" means all expenses (including attorneys' fees), damages,
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by Director;
3.2 "Proceeding" means any threatened, pending or completed civil,
criminal, administrative, or investigative action, suit or
proceeding (including any action or suit by or in the right of
Rockford); and
3.3 "State Statute" means the general corporation law of Arizona and
the indemnification provisions of any successor or amended
statute.
4 EXCLUSIONS FROM INDEMNIFICATION.
4.1 Inappropriate Conduct. Rockford will not indemnify Director if
liability arises as a result of Director's fraud, deliberate
dishonesty, or willful misconduct or if the State Statute
prohibits indemnification.
4.2 Proceedings Initiated by Director. Rockford is not obligated to
indemnify Director in connection with a Proceeding initiated by
Director unless (a) the Proceeding was authorized or permitted by
Rockford or (b) the Proceeding is to enforce rights to
indemnification under this Agreement.
5 CONTINUATION OF INDEMNITY. Rockford's obligations under this Agreement
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continue (a) during the period Director serves as a director of Rockford or
as an officer or director of any other corporation at Rockford's request
and (b) as long as Director is subject to any Proceeding by reason of
Director's service.
6 PROCEDURES.
6.1 Notice. Director must notify Rockford of the threat or
commencement of any Proceeding. Director's delay in notifying
Rockford of the threat or commencement of any Proceeding will
relieve Rockford from its obligation to indemnify Director to
the extent (but only to the extent) that the delay in
notification materially prejudices Rockford's defense of the
Proceeding.
6.2 Advance of Expenses. Rockford will pay expenses (including
attorneys fees) reasonably incurred or to be incurred by
Director in defending a Proceeding, in advance of the final
disposition of the Proceeding, subject to the following
procedures:
(a) Director must first deliver to Rockford Director's
good faith certification that indemnification of
Director is permitted under this Agreement and the
State Statute.
(b) Upon receipt of the required certification, Rockford
will advance Director's expenses in defending the
Proceeding unless Rockford's Board of Directors
certifies in good faith that it reasonably believes
that indemnification is not permitted under this
Agreement or the State Statute.
(c) If the Board of Directors makes such a certification,
then Rockford will retain independent counsel,
reasonably satisfactory to Director, to investigate
whether indemnification is permitted under this
Agreement and the State Statute. Unless otherwise
agreed by Rockford and Director, counsel must
complete its investigation and issue a finding within
30 days after counsel's retention.
(1) If counsel's finding is that indemnification
is permitted, then Rockford will advance
Director's expenses in the Proceeding and
will pay the fees of counsel.
(2) If counsel's finding is that indemnification
is prohibited, then Rockford is not required
to advance Director's expenses in the
Proceeding and Director will pay the fees of
counsel.
(3) The finding of counsel is not evidence of
Director's final responsibility. The finding
is final only to determine Rockford's
obligation to advance Director's expenses in
advance of the final disposition of the
Proceeding. Counsel's finding (i) against
Director will not prevent
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Director from seeking indemnification for the expenses upon
the final disposition of the Proceeding and (ii) against
Rockford will not prevent Rockford from seeking repayment of
the expenses advanced upon the final disposition of the
Proceeding.
(d) If Rockford is obligated to advance expenses, its obligation
is subject to its right to assume the defense of the
Proceeding.
(e) If Rockford is obligated to advance expenses, it is obligated
to make payments only against bills as rendered, for expenses
actually incurred, and on commercially reasonable terms.
Rockford is not obligated to pay an excessive retainer.
6.3 Defense of Claim. Upon receipt by Rockford of notice of a Proceeding:
(a) Rockford is entitled to participate in the Proceeding at its
own expense.
(b) Rockford is entitled to assume the defense of the Proceeding,
with counsel reasonably acceptable to Director. After notice
from Rockford to Director of its election to assume the
defense, Rockford is not liable for any legal or other
expenses subsequently incurred by Director in connection with
the Proceeding, other than reasonable costs of investigation
or as otherwise provided in this section.
(c) Director may employ his or her own counsel in the Proceeding,
but the fees and expenses of counsel, incurred after notice of
the Rockford's assumption of the defense, will be at
Director's expense unless
(1) Rockford has authorized Director's employment of
counsel,
(2) Director has reasonably concluded, based on the
opinion of his or her counsel, that there is a
conflict of interest or position between Rockford and
Director in the conduct of the defense, or
(3) Rockford has not in fact employed counsel to assume
the defense.
In each of these cases the fees and expenses of counsel for
Director will be at Rockford's expense if Rockford is
determined ultimately to be responsible to indemnify Director
with respect to the Proceeding.
6.4 Settlement.
(a) Rockford is not obligated to reimburse the costs of a
settlement unless it has agreed to the settlement.
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(b) If Director unreasonably fails to enter into a settlement
agreed to by the opposing party and Rockford, then Rockford's
indemnification obligation to Director in the Proceeding will
not exceed (1) the amount of the agreed settlement plus (2)
expenses incurred before the settlement could have been
effected.
7 OFFSET FOR OTHER PAYMENTS. Rockford is not liable to make any payment under
this Agreement for a Loss if the Loss is paid on behalf of Rockford from
insurance or any other source.
8 REPAYMENT OF EXPENSES. If a final judicial decision (from which there is no
further right of appeal) determines that Rockford is not permitted to
indemnify Director, then Director will reimburse Rockford for (a)
reasonable expenses incurred to defend the Proceeding and (b) all amounts
Rockford advanced to Director to defend the Proceeding.
9 ATTORNEYS' FEES. If either party brings an action to enforce rights or to
collect monies due under this Agreement, the prevailing party is entitled
to recover reasonable fees and expenses, including attorneys' fees, costs,
and expenses, incurred in such action.
10 INDUCEMENT FOR CONTINUED SERVICE. Rockford acknowledges that (a) it has
entered into this Agreement and assumed the obligations imposed on Rockford
in order to induce Director to continue to serve Rockford and (b) Director
is relying upon this Agreement in continuing to serve Rockford.
11 SEVERABILITY. Each provision of this Agreement is a separate and distinct
agreement and independent of the others. If a term of this Agreement is
unenforceable, that term will be deleted from this Agreement and the
enforceability of this Agreement will be otherwise unaffected.
12 GOVERNING LAW. The laws of Arizona govern this Agreement.
13 BINDING EFFECT. This Agreement is binding upon Director and upon Rockford,
its successors and assigns (including any transferee of all or
substantially all of its assets and any successor by merger or operation of
law). This Agreement inures to the benefit of Director and Director's
heirs, personal representatives, executors, and administrators.
14 AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement is effective unless in writing signed by
both parties.
15 THIRD PARTY BENEFIT. Nothing in this Agreement is intended to confer any
rights or remedies on any person other than parties and their respective
heirs, personal
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representatives, executors and administrators, successors, and assigns.
16 NOTICES. Notices under this Agreement are effective when delivered, or
three days after mailing, first class postage prepaid and return receipt
requested, to the addresses on the signature page of this Agreement. A
party may change its address for notice by giving notice to the other
party.
17 EFFECTIVE DATE. This Agreement is executed and effective __________, 1999.
Rockford Corporation, an Arizona corporation
By: /s/ W. Xxxx Xxxxxx
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Title: President and Chief Executive Officer
Address: 000 X. Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
/s/
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Director
Address:__________________________________________
__________________________________________
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