EXHIBIT 10.1
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INDEMNIFICATION AGREEMENT
Indemnification Agreement, dated as of __________, 2006, between BKF
Capital Group, Inc., a Delaware corporation (the "COMPANY"), and
______________________ ("INDEMNITEE").
WHEREAS, qualified persons are reluctant to serve corporations as
directors, officers or otherwise unless they are provided with broad
indemnification and insurance against claims arising out of their service to
and activities on behalf of the corporations; and
WHEREAS, the Company has determined that attracting and retaining such
persons is in the best interests of the Company's stockholders and that it is
reasonable, prudent and necessary for the Company to indemnify such persons to
the fullest extent permitted by applicable law and to provide reasonable
assurance regarding insurance;
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. DEFINED TERMS; CONSTRUCTION.
(a) DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"CHANGE IN CONTROL" means, and shall be deemed to have occurred if, on
or after the date of this Agreement, (I) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended),
other than (A) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries acting in such
capacity, or (B) a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing more than 20% of the total voting power
represented by the Company's then outstanding Voting Securities, (II) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the board of directors of the Company and any new director
whose election by the board of directors of the Company or nomination for
election by the Company's stockholders was approved by a vote of at least two
thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a majority
thereof, (III) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation other than a merger or
consolidation that would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
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surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, (IV) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series
of related transactions) all or substantially all of its assets, or (V) the
Company shall file or have filed against it, and such filing shall not be
dismissed, any bankruptcy, insolvency or dissolution proceedings, or a
trustee, administrator or creditors committee shall be appointed to manage or
supervise the affairs of the Company.
"CORPORATE STATUS" means the status of a person who is or was a
director (or a member of any committee of a board of directors), officer,
employee or agent (including without limitation a manager of a limited
liability company) of the Company or any of its subsidiaries, or of any
predecessor thereof, or is or was serving at the request of the Company as a
director (or a member of any committee of a board of directors), officer,
employee or agent (including without limitation a manager of a limited
liability company) of another corporation, limited liability company,
partnership, joint venture, trust or other enterprise, or of any predecessor
thereof, including service with respect to an employee benefit plan.
"DETERMINATION" means a determination that either (X) there is a
reasonable basis for the conclusion that indemnification of Indemnitee is
proper in the circumstances because Indemnitee met a particular standard of
conduct (a "FAVORABLE DETERMINATION") or (Y) there is no reasonable basis for
the conclusion that indemnification of Indemnitee is proper in the
circumstances because Indemnitee met a particular standard of conduct (an
"ADVERSE DETERMINATION"). An Adverse Determination shall include the decision
that a Determination was required in connection with indemnification and the
decision as to the applicable standard of conduct.
"DGCL" means the General Corporation Law of the State of Delaware, as
amended from time to time.
"EXPENSES" means all attorneys' fees and expenses, retainers, court,
arbitration and mediation costs, transcript costs, fees of experts, bonds,
witness fees, costs of collecting and producing documents, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in,
appealing or otherwise participating in a Proceeding.
"INDEPENDENT LEGAL COUNSEL" means an attorney or firm of attorneys
competent to render an opinion under the applicable law, selected in
accordance with the provisions of Section 5(e), who has not otherwise
performed any services for the Company or any of its
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subsidiaries or for Indemnitee within the last three years (other than with
respect to matters concerning the rights of Indemnitee under this Agreement or
of other Indemnitees under indemnity agreements similar to this Agreement).
"PROCEEDING" means a threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative,
including without limitation a claim, demand, discovery request, formal or
informal investigation, inquiry, administrative hearing, arbitration or other
form of alternative dispute resolution, including an appeal from any of the
foregoing.
"VOTING SECURITIES" means any securities of the Company that vote
generally in the election of directors.
(b) CONSTRUCTION. For purposes of this Agreement,
(i) References to the Company and any of its
"subsidiaries" shall include any corporation, limited liability
company, partnership, joint venture, trust or other entity or
enterprise that before or after the date of this Agreement is party to
a merger or consolidation with the Company or any such subsidiary or
that is a successor to the Company as contemplated by Section 8(d)
(whether or not such successor has executed and delivered the written
agreement contemplated by Section 8(d)).
(ii) References to "fines" shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan.
(iii) References to a "witness" in connection with a
Proceeding shall include any interviewee or person called upon to
produce documents in connection with such Proceeding.
2. AGREEMENT TO SERVE.
Indemnitee agrees to serve as a [director][officer] of the Company or
one or more of its subsidiaries and in such other capacities as Indemnitee may
serve at the request of the Company from time to time, and by its execution of
this Agreement the Company confirms its request that Indemnitee serve as a
[director][officer] and in such other capacities. Indemnitee shall be entitled
to resign or otherwise terminate such service with immediate effect at any
time, and neither such resignation or termination nor the length of such
service shall affect Indemnitee's rights under this Agreement. This Agreement
shall not constitute an employment agreement, supersede any employment
agreement to which Indemnitee is a party or create any right of Indemnitee to
continued employment or appointment.
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3. INDEMNIFICATION.
(a) GENERAL INDEMNIFICATION. The Company shall indemnify
Indemnitee, to the fullest extent permitted by applicable law in effect on the
date hereof or as amended to increase the scope of permitted indemnification,
against Expenses, losses, liabilities, judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other charges in
connection therewith) incurred by Indemnitee or on Indemnitee's behalf in
connection with any Proceeding in any way connected with, resulting from or
relating to Indemnitee's Corporate Status.
(b) ADDITIONAL INDEMNIFICATION REGARDING EXPENSES. Without
limiting the foregoing, in the event any Proceeding is initiated by Indemnitee
or the Company or any of its subsidiaries to enforce or interpret this
Agreement or any rights of Indemnitee to indemnification or advancement of
Expenses (or related obligations of Indemnitee) under the Company's or any
such subsidiary's certificate of incorporation or bylaws, any other agreement
to which Indemnitee and the Company or any of its subsidiaries are party, any
vote of stockholders or directors of the Company or any of its subsidiaries,
the DGCL, any other applicable law or any liability insurance policy, the
Company shall indemnify Indemnitee against all Expenses incurred by Indemnitee
or on Indemnitee's behalf in connection with such Proceeding, whether or not
Indemnitee is successful in such Proceeding, except to the extent that the
court presiding over such Proceeding determines that material assertions made
by Indemnitee in such Proceeding were in bad faith or were frivolous.
(c) PARTIAL INDEMNIFICATION. If Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for a
portion of any Expenses, losses, liabilities, judgments, fines, penalties and
amounts paid in settlement incurred by Indemnitee, but not for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for such
portion.
(d) NONEXCLUSIVITY. The indemnification provided by this
Agreement shall not be deemed exclusive of any rights to which Indemnitee may
be entitled under the Company's certificates of incorporation or bylaws, any
agreement, any vote of stockholders or directors, the DGCL, any other
applicable law or any liability insurance policy.
(e) EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated under the Agreement to
indemnify Indemnitee:
(i) For Expenses incurred in connection with
Proceedings initiated or brought voluntarily by the Indemnitee and not
by way of defense, counterclaim or crossclaim, except (X) as
contemplated by Section 3(b), (Y)
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in specific cases if the board of directors of the Company has
approved the initiation or bringing of such Proceeding, and (Z) as may
be required by law.
(ii) For an accounting of profits arising from the
purchase and sale by the Indemnitee of securities within the meaning
of Section 16(b) of the Securities Exchange Act of 1934, as amended,
or any similar successor statute.
(f) 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 the Indemnitee, who shall execute such
documents and do such acts as the Company may reasonably request to secure
such rights and to enable the Company effectively to bring suit to enforce
such rights.
4. ADVANCEMENT OF EXPENSES.
The Company shall pay all Expenses incurred by Indemnitee in
connection with any Proceeding in any way connected with, resulting from or
relating to Indemnitee's Corporate Status, other than a Proceeding initiated
by Indemnitee for which the Company would not be obligated to indemnify
Indemnitee pursuant to Section 3(e)(i), in advance of the final disposition of
such Proceeding and without regard to whether Indemnitee will ultimately be
entitled to be indemnified for such Expenses and without regard to whether an
Adverse Determination has been made, except as contemplated by the last
sentence of Section 5(f). Indemnitee shall repay such amounts advanced if and
to the extent that it shall ultimately be determined in a decision by a court
of competent jurisdiction from which no appeal can be taken that Indemnitee is
not entitled to be indemnified by the Company for such Expenses. Such
repayment obligation shall be unsecured and shall not bear interest.
5. INDEMNIFICATION PROCEDURE.
(a) NOTICE OF PROCEEDING; COOPERATION. Indemnitee shall
give the Company notice in writing as soon as practicable of any Proceeding
for which indemnification will or could be sought under this Agreement,
PROVIDED that any failure or delay in giving such notice shall not relieve the
Company of its obligations under this Agreement unless and to the extent that
(I) none of the Company and its subsidiaries are party to or aware of such
Proceeding and (II) the Company is materially prejudiced by such failure.
(b) SETTLEMENT. The Company will not, without the prior
written consent of Indemnitee, which may be provided or withheld in
Indemnitee's sole discretion, effect any settlement of any Proceeding against
Indemnitee or which could have been brought against Indemnitee unless such
settlement solely involves the payment of money by persons other than
Indemnitee and includes an unconditional release of
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Indemnitee from all liability on any matters that are the subject of such
Proceeding and an acknowledgment that Indemnitee denies all wrongdoing in
connection with such matters. The Company shall not be obligated to indemnify
Indemnitee against amounts paid in settlement of a Proceeding against
Indemnitee if such settlement is effected by Indemnitee without the Company's
prior written consent, which shall not be unreasonably withheld.
(c) REQUEST FOR PAYMENT; TIMING OF PAYMENT. To obtain
indemnification payments or advances under this Agreement, Indemnitee shall
submit to a Company a written request therefor, together with such invoices or
other supporting information as may be reasonably requested by the Company and
reasonably available to Indemnitee. The Company shall make indemnification
payments to Indemnitee no later than 30 days, and advances to Indemnitee no
later than 10 days, after receipt of the written request of Indemnitee.
(d) DETERMINATION. The Company intends that Indemnitee
shall be indemnified to the fullest extent permitted by law as provided in
Section 3 and that no Determination shall be required in connection with such
indemnification. In no event shall a Determination be required in connection
with advancement of Expenses pursuant to Section 4 or in connection with
indemnification for Expenses incurred as a witness or incurred in connection
with any Proceeding or portion thereof with respect to which Indemnitee has
been successful on the merits or otherwise. Any decision that a Determination
is required by law in connection with any other indemnification of Indemnitee,
and any such Determination, shall be made within 30 days after receipt of
Indemnitee's written request for indemnification, as follows:
(i) If no Change in Control has occurred, (U) by a
majority vote of the directors of the Company who are not parties to
such Proceeding, even though less than a quorum, with the advice of
Independent Legal Counsel, or (W) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, with the advice of Independent Legal Counsel, or (Y) if there
are no such directors, or if such directors so direct, by Independent
Legal Counsel in a written opinion to the Company and Indemnitee, or
(Z) by the stockholders of the Company.
(ii) If a Change in Control has occurred, by
Independent Legal Counsel in a written opinion to the Company and
Indemnitee.
The Company shall pay all Expenses incurred by Indemnitee in connection with a
Determination.
(e) INDEPENDENT LEGAL COUNSEL. If there has not been a
Change in Control, Independent Legal Counsel shall be selected by the board of
directors of the
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Company and approved by Indemnitee (which approval shall not be unreasonably
withheld or delayed). If there has been a Change in Control, Independent Legal
Counsel shall be selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld or delayed). The Company shall pay
the fees and expenses of Independent Legal Counsel and indemnify Independent
Legal Counsel against any and all expenses (including attorneys' fees),
claims, liabilities and damages arising out of or relating to its engagement.
(f) CONSEQUENCES OF DETERMINATION; REMEDIES OF INDEMNITEE.
The Company shall be bound by and shall have no right to challenge a Favorable
Determination. If an Adverse Determination is made, or if for any other reason
the Company does not make timely indemnification payments or advances of
Expenses, Indemnitee shall have the right to commence a Proceeding before a
court of competent jurisdiction to challenge such Adverse Determination and/or
to require the Company to make such payments or advances. Indemnitee shall be
entitled to be indemnified for all Expenses incurred in connection with such a
Proceeding in accordance with Section 3(b) and to have such Expenses advanced
by the Company in accordance with Section 4. If Indemnitee fails to timely
challenge an Adverse Determination, or if Indemnitee challenges an Adverse
Determination and such Adverse Determination has been upheld by a final
judgment of a court of competent jurisdiction from which no appeal can be
taken, then, to the extent and only to the extent required by such Adverse
Determination or final judgment, the Company shall not be obligated to
indemnify or advance Expenses to Indemnitee under this Agreement.
(g) PRESUMPTIONS; BURDEN AND STANDARD OF PROOF. In
connection with any Determination, or any review of any Determination, by any
person, including a court:
(i) It shall be a presumption that a Determination
is not required.
(ii) It shall be a presumption that Indemnitee has
met the applicable standard of conduct and that indemnification of
Indemnitee is proper in the circumstances.
(iii) The burden of proof shall be on the Company to
overcome the presumptions set forth in the preceding clauses (i) and
(ii), and each such presumption shall only be overcome if the Company
establishes that there is no reasonable basis to support it.
(iv) The termination of any Proceeding by judgment,
order, finding, settlement (whether with or without court approval) or
conviction, or upon a plea of NOLO CONTENDERE, or its equivalent,
shall not create a presumption that indemnification is not proper or
that Indemnitee did not meet the applicable
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standard of conduct or that a court has determined that
indemnification is not permitted by this Agreement or otherwise.
(v) Neither the failure of any person or persons
to have made a Determination nor an Adverse Determination by any
person or persons shall be a defense to Indemnitee's claim or create a
presumption that Indemnitee did not meet the applicable standard of
conduct, and any Proceeding commenced by Indemnitee pursuant to
Section 5(f) shall be DE NOVO with respect to all determinations of
fact and law.
6. DIRECTORS AND OFFICERS LIABILITY INSURANCE.
(a) MAINTENANCE OF INSURANCE. So long as the Company or
any of its subsidiaries maintains liability insurance for any directors,
officers, employees or agents of any such person, the Company shall ensure
that Indemnitee is covered by such insurance in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's and its subsidiaries' then current directors and
officers.
(b) NOTICE TO INSURERS. Upon receipt of notice of a
Proceeding pursuant to Section 5(a), the Company shall give or cause to be
given prompt notice of such Proceeding to all insurers providing liability
insurance in accordance with the procedures set forth in all applicable or
potentially applicable policies. The Company shall thereafter take all
necessary action to cause such insurers to pay all amounts payable in
accordance with the terms of such policies.
7. EXCULPATION, ETC.
(a) LIMITATION OF LIABILITY. Indemnitee shall not be
personally liable to the Company or any of its subsidiaries or to the
stockholders of the Company or any such subsidiary for monetary damages for
breach of fiduciary duty as a director of the Company or any such subsidiary;
provided, however, that the foregoing shall not eliminate or limit the
liability of the Indemnitee (I) for any breach of the Indemnitee's duty of
loyalty to the Company or such subsidiary or the stockholders thereof; (II)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law; (III) under Section 174 of the
DGCL or any similar provision of other applicable corporations law; or (IV)
for any transaction from which the Indemnitee derived an improper personal
benefit. If the DGCL or such other applicable law shall be amended to permit
further elimination or limitation of the personal liability of directors, then
the liability of the Indemnitee shall, automatically, without any further
action, be eliminated or limited to the fullest extent permitted by the DGCL
or such other applicable law as so amended.
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(b) PERIOD OF LIMITATIONS. No legal action shall be
brought and no cause of action shall be asserted by or in the right of the
Company or any of its subsidiaries against Indemnitee or Indemnitee's estate,
spouses, heirs, executors, personal or legal representatives, administrators
or assigns after the expiration of two years from the date of accrual of such
cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a
legal action within such two-year period, PROVIDED that if any shorter period
of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
8. MISCELLANEOUS.
(a) SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (I) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each portion of
any section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; (II) such provision
or provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (III) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
(b) NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
duly given (I) on the date of delivery if delivered personally, or by
facsimile, upon confirmation of receipt, (II) on the first business day
following the date of dispatch if delivered by a recognized next-day courier
service or (III) on the third business day following the date of mailing if
delivered by domestic registered or certified mail, properly addressed, or on
the fifth business day following the date of mailing if sent by airmail from a
country outside of North America, to Indemnitee as shown on the signature page
of this Agreement, to the Company at the address shown on the signature page
of this Agreement, or in either case as subsequently modified by written
notice.
(c) AMENDMENT AND TERMINATION. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless it is
in writing signed by all 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.
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(d) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon the Company and its respective successors and assigns, including
without limitation any acquiror of all or substantially all of the Company's
assets or business, and any survivor of any merger or consolidation to which
the Company is party, and shall inure to the benefit of the Indemnitee and the
Indemnitee's estate, spouses, heirs, executors, personal or legal
representatives, administrators and assigns. The Company shall require and
cause any such successor, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement as if it were named as the Company herein, and the Company shall not
permit any such purchase of assets or business, acquisition of securities or
merger or consolidation to occur until such written agreement has been
executed and delivered. No such assumption and agreement shall relieve the
Company of any of its obligations hereunder, and this Agreement shall not
otherwise be assignable by the Company.
(e) CHOICE OF LAW; CONSENT TO JURISDICTION. This Agreement
shall be governed by and its provisions construed in accordance with the laws
of the State of Delaware, as applied to contracts between Delaware residents
entered into and to be performed entirely within Delaware, without regard to
the conflict of law principles thereof. The Company and Indemnitee each hereby
irrevocably consents to the jurisdiction of the courts of the State of
Delaware for all purposes in connection with any Proceeding which arises out
of or relates to this Agreement and agree that any action instituted under
this Agreement shall be brought only in the state courts of the State of
Delaware.
(f) INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets
forth the entire understanding between the parties hereto and supersedes and
merges all previous written and oral negotiations, commitments, understandings
and agreements relating to the subject matter hereof between the parties
hereto, PROVIDED that the provisions hereof shall not supersede the provisions
of the Company's respective certificates of incorporation or bylaws, any
agreement, any vote of stockholders or directors, the DGCL or other applicable
law, to the extent any such provisions shall be more favorable to Indemnitee
than the provisions hereof.
(g) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BKF Capital Group, Inc.
By:
________________________________
Name:
Title:
Address: Xxx Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
AGREED TO AND ACCEPTED:
INDEMNITEE:
By:
________________________________
Name:
Title:
Address:
_____________________________
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