INDEMNIFICATION AGREEMENT
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THIS INDEMNIFICATION AGREEMENT, dated as of July 25, 1997 ("this
Agreement"), is by and among New Xxxxxxx Components, Inc., a Delaware
corporation, (the "Indemnitor") and Xxxxxx X. Xxxxxxxxxxx ("Indemnitee").
WITNESSETH
WHEREAS, highly competent persons are becoming more reluctant to
serve publicly-held corporations as directors, executive officers, or in other
capacities unless they are provided with adequate protection through insurance
and indemnification against inordinate risks of claims and actions against
them arising out of their service to and activities on behalf of the
corporation; and
WHEREAS, the current difficulties or virtual impossibility of
obtaining adequate insurance and uncertainties relating to indemnification
have increased the difficulty of attracting and retaining such persons; and
WHEREAS, the Boards of Directors of the Indemnitor have determined
that the inability to attract and retain such persons is detrimental to the
best interests of the Indemnitor's stockholders and that the Indemnitor should
act to assure such persons that there will be increased certainty of such
protection in the future; and
WHEREAS, it is reasonable, prudent and necessary for the Indemnitor
contractually to obligate themselves to indemnify such persons to the fullest
extent permitted by applicable law so that they will serve or continue to
serve the Indemnitor free from undue concern that they will not be so
indemnified; and
WHEREAS, the Certificate of Incorporation (the "Certificate") and the
Bylaws (the "Bylaws") of each of the Indemnitor provide for the
indemnification of the directors, officers, agents and employees of the
Indemnitor to the full extent permitted by the General Corporation Law of the
State of Delaware (the "Act"). The Certificate, the Bylaws and the Act
specifically provide that they are not exclusive, and thereby contemplate that
contracts may be entered into between the Indemnitor and the members of their
Boards of Directors and their executive officers with respect to
indemnification of such directors and their executive officers; and
WHEREAS, pursuant to Jordan Telecommunication Products, Inc.'s
("JTP") proposed $190,000,000 Senior Note, $120,000,000 Discount Note and
$25,000,000 Senior Exchangeable Preferred Stock Units offering pursuant to
that certain Offering Circular, dated July 21, 1997 (the "Offering"), some of
the assets of predecessor companies to the Indemnitor are being purchased from
Jordan Industries, Inc. by JTP, which has formed some of the Indemnitor for
this purpose,
as part of a recapitalization which will make JTP a stand-alone, industry
focused company. Therefore, the newly formed Indemnitor desire to enter into
this Indemnification Agreement with Indemnitee, which is substantially similar
to Indemnification Agreements currently in effect between Indemnitee and other
subsidiaries of JTP; and
WHEREAS, this Agreement is being entered into as part of Indemnitee's
total compensation for serving as a director and/or an executive officer, as
the case may be;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Indemnitor jointly and severally on the one hand and
Indemnitee on the other do hereby covenant and agree as follows:
SECTION 1. Service by Indemnitee.
Indemnitee agrees to serve as director of the Indemnitor and/or
executive officer of the Indemnitor if so designated by the Indemnitor and
appointed by the respective Boards of Directors, and agrees to the
indemnification provisions provided for herein. Indemnitee may at any time and
for any reason resign from such position (subject to any other contractual
obligation or other obligation imposed by operation of law), in which event
the Indemnitor shall have no obligation under this Agreement to continue
Indemnitee in any such position.
SECTION 2. Indemnification.
The Indemnitor shall indemnify Indemnitee to the fullest extent
permitted by applicable law in effect on the date hereof, notwithstanding that
such indemnification is not specifically authorized by this Agreement, the
Certificate, the Bylaws, the Act or otherwise. In the event of any change,
after the date of this Agreement, in any applicable law, statute or rule
regarding the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, such changes, to the extent that they would
expand Indemnitee's rights hereunder, shall be within the scope of
Indemnitee's rights and the Indemnitor's obligations hereunder, and, to the
extent that they would narrow Indemnitee's rights hereunder, shall be excluded
from this Agreement; provided, however, that any change that is required by
applicable laws, statutes or rules to be applied to this Agreement shall be so
applied regardless of whether the effect of such change is to narrow
Indemnitee's rights hereunder. Without diminishing the scope of the
indemnification provided by this Section 2, the rights of indemnification of
Indemnitee provided hereunder shall include indemnification in respect of the
Offering and shall not be limited to those rights set forth hereinafter,
except to the extent expressly prohibited by applicable law.
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SECTION 3. Action or Proceeding Other Than an Action by or in the
Right of the Indemnitor.
Indemnitee shall be entitled to the indemnification rights provided
in this Section 3 if he is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative in nature, other than an
action by or in the right of the Indemnitor, by reason of the fact that he is
or was a director, officer, employee, agent or fiduciary of the Indemnitor or
is or was serving at the request of the Indemnitor as a director, officer,
employee, agent, partner, trustee or fiduciary of any other entity, or by
reason of anything done or not done by him in any such capacity. Pursuant to
this Section 3, Indemnitee shall be indemnified against reasonable costs and
expenses (including, but not limited to, counsel fees, costs, judgments,
penalties, fines, ERISA excise taxes, and amounts paid in settlement)
(collectively, "Damages") actually and reasonably incurred by him in
connection with such action, suit or proceeding (including, but not limited
to, the investigation, defense or appeal thereof), if, in the case of conduct
in his official capacity with the corporation, he acted in good faith and in
the Indemnitor's best interests, and in all other cases, he acted in good
faith and was at least not opposed to the Indemnitor's best interests, and
with respect to any criminal action or proceeding had no reasonable cause to
believe his conduct was unlawful, except that no indemnification shall be made
in respect of any claim, issue or matter as to which Indemnitee shall have
been finally adjudged to be liable for (i) negligence or misconduct in the
performance of his duty to any of the Indemnitor unless and only to the extent
that the court in which such action or suit was brought, or any other court of
competent jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses as
such court shall deem proper or (ii) the indemnification does not relate to
any liability arising under Section 16(b) of the Securities Exchange Act of
1934, as amended, or any of the rules or regulations promulgated thereunder.
Notwithstanding the foregoing, the Indemnitor shall be required to indemnify
an officer or director in connection with an action, suit or proceeding
initiated by such person only if such action, suit or proceeding was
authorized by the Board or a committee thereof. No indemnity pursuant to this
Agreement shall be provided by the Indemnitor for Damages that have been paid
directly to Indemnitee by an insurance carrier under a policy of directors'
and officers' liability insurance maintained by the Indemnitor.
SECTION 4. Actions by or in the Right of the Indemnitor.
Indemnitee shall be entitled to the indemnification rights provided
in this Section 4 if he is or was made a party or is threatened to be made a
party to any threatened, pending or completed action, suit, or proceeding,
whether civil, criminal, administrative or investigative brought by or in the
right of the Indemnitor to procure a judgment in their favor by reason of the
fact that he is or was a director, officer, employee, agent or fiduciary of
the Indemnitor or is or was serving at the request of the Indemnitor as a
director, officer, employee, agent, partner, trustee or fiduciary of any other
entity by reason of anything done or not done by
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him in any such capacity. Pursuant to this Section 4, Indemnitee shall be
indemnified against Damages (as defined in Section 3 of Agreement) actually
and reasonably incurred by him in connection with such action or suit
(including, but not limited to the investigation, defense, settlement or
appeal thereof) if, in the case of conduct in his official capacity with the
corporation, he acted in good faith and in the Indemnitor's best interests,
and in all other cases, he acted in good faith and was at least not opposed to
the Indemnitor's best interests, except that no indemnification shall be made
in respect of any claim, issue or matter as to which Indemnitee shall have
been finally adjudged to be liable for (i) negligence or misconduct in the
performance of his duty to any of the Indemnitor unless and only to the extent
that the court in which such action or suit was brought, or any other court of
competent jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses as
such court shall deem proper or (ii) the indemnification does not relate to
any liability arising under Section 16(b) of the Securities Exchange Act of
1934, as amended, or any of the rules or regulations promulgated thereunder.
Notwithstanding the foregoing, the Indemnitor shall be required to indemnify
an officer or director in connection with an action, suit or proceeding
initiated by such person only if such action, suit or proceeding was
authorized by the Board or a committee thereof. No indemnity pursuant to this
Agreement shall be provided by the Indemnitor for Damages that have been paid
directly to Indemnitee by an insurance carrier under a policy of directors'
and officers' liability insurance maintained by the Indemnitor.
SECTION 5. Indemnification for Costs, Charges and Expenses of
Successful Party.
Notwithstanding the other provisions of this Agreement, to the extent
that Indemnitee has served as a witness on behalf of the Indemnitor or has
been successful, on the merits or otherwise, including, without limitation,
the dismissal of an action without prejudice, in defense of any action, suit
or proceeding referred to in Section 3 and Section 4 hereof, or in defense of
any claim, issue or matter therein, shall be indemnified against all
reasonable costs, charges, and expenses (including counsel fees) actually and
reasonably incurred by him or on his behalf in connection therewith.
SECTION 6. Partial Indemnification
If Indemnitee is only partially successful in the defense,
investigation, settlement or appeal of any action, suit, investigation or
proceeding described in Section 3 or 4 hereof, and as a result is not entitled
under Section 5 hereof to indemnification by the Company for the total amount
of the expenses (including attorneys' fees), costs, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by him,
the Company shall nevertheless indemnify Indemnitee, as a matter of right
pursuant to Section 5 hereof, to the extent Indemnitee has been partially
successful.
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SECTION 7. Determination of Entitlement to Indemnification.
Upon written request by Indemnitee for indemnification pursuant to
Section 3 or Section 4 hereof, the entitlement of Indemnitee to
indemnification pursuant to the terms of this Agreement shall be determined by
the following person or persons who shall be empowered to make such
determination: (a) the Boards of Directors of the Indemnitor by a majority
vote of a quorum consisting of Disinterested Directors (as hereinafter
defined); or (b) if such a quorum is not obtainable or, even if obtainable, if
the Board of Directors by the majority vote of Disinterested Directors so
directs, by Independent Counsel (as hereinafter defined) in a written opinion
to the Board of Directors, a copy of which shall be delivered to Indemnitee;
or (c) by the stockholders, but shares owned by or voted under the control of
directors, including the Indemnitee, who are at the time parties to the
proceeding may not be voted on the determination. Such Independent Counsel
shall be selected by the Board of Directors and approved by Indemnitee. Upon
failure of the Board of Directors to so select such Independent Counsel or
upon failure of Indemnitee to so approve, such Independent Counsel shall be
selected by the Chancellor of the State of Delaware or such other person as
the Chancellor shall designate to make such selection. Such determination of
entitlement to indemnification shall be made no later than sixty (60) days
after receipt by the Indemnitor of a written request for indemnification. Such
request shall include documentation or information which is necessary for such
determination and which is reasonably available to Indemnitee. Any Damages
incurred by Indemnitee in connection with his request for indemnification
hereunder shall be borne by the Indemnitor. The Indemnitor hereby indemnify
and agree to hold Indemnitee harmless therefrom irrespective of the outcome of
the determination of Indemnitee's entitlement to indemnification. If the
person making such determination shall determine that Indemnitee is entitled
to indemnification as to part (but not all) of the application for
indemnification, such person shall reasonably prorate such partial
indemnification among such claims, issues or matters.
SECTION 8. Presumptions and Effect of Certain Proceedings.
The Secretary of the Indemnitor shall, promptly upon receipt of
Indemnitee's request for indemnification, advise in writing its Board of
Directors and the Boards of Directors of the other Indemnitor or such other
person or persons empowered to make the determination as provided in Section 7
that Indemnitee has made such request for indemnification. Indemnitee shall be
presumed to be entitled to indemnification hereunder and the Indemnitor shall
have the burden of proof in the making of any determination contrary to such
presumption. If the person or persons so empowered to make such determination
shall have failed to make the requested indemnification within 60 days after
receipt by the Indemnitor of such request, the requisite determination of
entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be absolutely entitled to such indemnification, absent actual
and material fraud in the request for indemnification. The termination of any
action, suit, investigation or proceeding described in Section 3 or Section 4
hereof by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself (a) create a presumption
that Indemnitee did not act in good faith and in a manner
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which he reasonably believed to be in or not opposed to the best interests of
the Indemnitor, and, with respect to any criminal action or proceeding, that
Indemnitee had reasonable cause to believe that his conduct was unlawful or
(b) otherwise adversely affect the rights of Indemnitee to indemnification
except as may be provided herein.
SECTION 9. Advancement of Expenses and Costs.
All reasonable expenses and costs incurred by Indemnitee who is party
to a proceeding (including counsel fees, retainers and advances of
disbursements required of Indemnitee) (collectively, the "Expense Advance")
shall be paid by the Indemnitor in advance of the final disposition of such
action, suit or proceeding at the request of Indemnitee within twenty (20)
days after the receipt by the Indemnitor of a statement or statements from
Indemnitee requesting such advance or advances from time to time. Such
statement or statements shall reasonably evidence the expenses and costs
incurred by him in connection therewith. The Indemnitor's obligation to
provide an Expense Advance is subject to the following conditions: (i) if the
proceeding arose in connection with Indemnitee's service as a director and/or
executive officer of the Indemnitor (and not in any other capacity in which
Indemnitee rendered service, including service to any related company), then
the Indemnitee or his representative shall have executed and delivered to the
Indemnitor an undertaking, which need not be secured and shall be accepted
without reference to Indemnitee's financial ability to make repayment, by or
on behalf of Indemnitee to repay all Expense Advance if and to the extent that
it shall ultimately be determined by a final, unappealable decision rendered
by a court having jurisdiction over the parties and the question that
Indemnitee is not entitled to be indemnified for such Expense Advance under
this Agreement or otherwise; (ii) Indemnitee shall give the Indemnitor such
information and cooperation as it may reasonably request and as shall be
within Indemnitee's power; and (iii) Indemnitee shall furnish, upon request by
the Indemnitor and if required under applicable law, a written affirmation of
Indemnitee's good faith belief that any applicable standards of conduct have
been met by Indemnitee. Indemnitee's entitlement to such Expense Advance shall
include those incurred in connection with any proceeding by Indemnitee seeking
an adjudication pursuant to this Agreement. In the event that a claim for an
Expense Advance is made hereunder and is not paid in full within twenty (20)
days after written notice of such claim is delivered to the Indemnitor,
Indemnitee may, but need not, at any time thereafter bring suit against any of
the Indemnitor to recover the unpaid amount of the claim.
SECTION 10. Remedies of Indemnitee in Cases of
Determination not to Indemnify or to Advance
Expenses.
In the event that a determination is made that Indemnitee is not
entitled to indemnification hereunder or if payment has not been timely made
following a determination of entitlement to indemnification pursuant to
Sections 7 and 8, or if expenses are not advanced pursuant to Section 9,
Indemnitee shall be entitled to a final adjudication in an appropriate court
of the State of Delaware or any other court of competent jurisdiction of his
entitlement to such indemnification or advance. The Indemnitor shall not
oppose
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Indemnitee's right to seek any such adjudication or any other claim. Such
judicial proceeding shall be made de novo and Indemnitee shall not be
prejudiced by reason of a determination (if so made) that he is not entitled
to indemnification. If a determination is made or deemed to have been made
pursuant to the terms of Section 7 or Section 8 hereof that Indemnitee is
entitled to indemnification, the Indemnitor shall be bound by such
determination and is precluded from asserting that such determination has not
been made or that the procedure by which such determination was made is not
valid, binding and enforceable. The Indemnitor further agree to stipulate in
any such court that the Indemnitor are bound by all the provisions of this
Agreement and are precluded from making any assertion to the contrary. If the
court shall determine that Indemnitee is entitled to any indemnification
hereunder, the Indemnitor shall pay all reasonable Damages actually incurred
by Indemnitee in connection with such adjudication (including, but not limited
to, any appellate proceedings).
SECTION 11. Other Rights to Indemnification.
The indemnification and advancement of expenses (including counsel
fees) and costs provided by this Agreement shall not be deemed exclusive of
any other rights to which Indemnitee may now or in the future be entitled
under any provision of the By-laws, provisions of the Certificate, vote of
stockholders or Disinterested Directors, provision of law or otherwise.
SECTION 12. Counsel Fees and Other Expenses to Enforce Agreement.
In the event that Indemnitee is subject to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at
issue or seeks an adjudication or award in arbitration to enforce his rights
under, or to recover damages for breach of, this Agreement, Indemnitee, if he
prevails in whole or in part in such action, shall be entitled to recover from
the Indemnitor, and shall be indemnified by the Indemnitor against, any
reasonable expenses for counsel fees and disbursements actually and reasonably
incurred by him.
SECTION 13. Duration of Agreement.
This Agreement shall continue until and terminate upon the later of
(a) 10 years after Indemnitee has ceased to occupy any of the positions or
have any of the relationships described in Section 3 or Section 4 of this
Agreement or (b) the final termination of all pending or threatened actions,
suits, proceedings or investigations with respect to Indemnitee. This
Agreement shall be binding upon the Indemnitor and their successors and
assigns and shall inure to the benefit of Indemnitee and his spouse, assigns,
heirs, devisees, executors, administrators or other legal representatives.
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SECTION 14. Severability.
If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever (a) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and (b) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, all portions of any paragraph of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
SECTION 15. Identical Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original, but all of which
together shall constitute one and the same Agreement. Only one such
counterpart signed by the party against whom enforceability is sought needs to
be produced to evidence the existence of this Agreement.
SECTION 16. Headings.
The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or to affect the construction thereof.
SECTION 17. Definitions.
For purposes of this Agreement:
(a) "Disinterested Director" shall mean a director of the Indemnitor
who is not or was not a party to the action, suit, investigation or proceeding
in respect of which indemnification is being sought by Indemnitee.
(b) "Independent Counsel" shall mean a law firm or a member of a law
firm that neither is presently nor in the past five years has been retained to
represent (i) the Indemnitor or Indemnitee in any matter material to either
such party or (ii) any other party to the action, suit, investigation or
proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not
include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Indemnitor or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement.
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SECTION 18. 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 be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
SECTION 19. Mutual Acknowledgment.
The Indemnitor and Indemnitee acknowledge that, in certain instances,
federal law or public policy may override applicable state law and prohibit
the Indemnitor from indemnifying Indemnitee under this Agreement or otherwise.
For example, the Indemnitor and Indemnitee acknowledge that the U.S.
Securities and Exchange Commission (the "SEC") has taken the position that
indemnification is not permissible for liabilities arising under certain
federal securities laws, and federal legislation prohibits indemnification for
certain ERISA violations. Furthermore, Indemnitee understands and acknowledges
that the Indemnitor have undertaken or may be required in the future to
undertake with the SEC to submit the question of indemnification to a court in
certain circumstances for a determination of the Indemnitor's right under
public policy to indemnify Indemnitee.
SECTION 20. Notice by Indemnitee.
Indemnitee agrees promptly to notify the Indemnitor in writing upon
being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any matter which may be subject to
indemnification covered hereunder, either civil, criminal or investigative.
SECTION 21. Notices.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed or if (ii) mailed by certified or
registered mail with postage prepaid on the third business day after the date
on which it is so mailed, to the following addresses:
(a) if to Indemnitee:
c/o The Jordan Company
0 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
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(b) if to the Indemnitor:
c/o Jordan Telecommunication Products, Inc.
ArborLake Centre, Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
or to such other address as may have been furnished to Indemnitee by the
Indemnitor or to the Indemnitor by Indemnitee, as the case may be.
SECTION 22. Other Agreements.
This Agreement restates and supersedes, but does not limit or negate,
any indemnification, rights or interests of Indemnitee under any prior
agreements between the Indemnitor and Indemnitee.
SECTION 23. Governing Law.
The parties agree that this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
NEW XXXXXXX COMPONENTS, INC.
By:
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Xxxxxx X. Xxxxx
Authorized Officer
INDEMNITEE:
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Name: Xxxxxx X. Xxxxxxxxxxx
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