INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made on April 21, 1999 between
JPE, Inc., a Michigan corporation ("Corporation"), and Xxxxx X. Xxxxxx
("Officer").
Recitals
A. Officer is an officer of Corporation and Corporation desires Officer to
continue in such capacity. Officer is willing to continue Officer's
employment with Corporation if Officer receives the protections provided by
this Agreement.
B. Corporation's Bylaws obligate it to indemnify its directors and officers.
C. Corporation believes that (1) litigation against corporate directors and
officers, regardless of whether meritorious, is expensive and
time-consuming to defend; (2) there is a substantial risk of a large
judgment or settlement in litigation in which a corporate officer was
neither culpable nor profited personally to the detriment of the
corporation; (3) it is important for Officer to have assurance that
indemnification will be available if Officer acts in accordance with
reasonable business standards; and (4) because available directors and
officers liability insurance and the indemnification available from
Corporation are not adequate to fully protect Officer against the problems
discussed above, it is in the best interests of Corporation and its
shareholders for Corporation to contractually obligate itself to indemnify
Officer pursuant to this Agreement.
D. Based upon the conclusions stated in Recital C above, in consideration of
Officer's continued employment with Corporation, Corporation wishes to
enter into this Agreement with Officer.
Therefore, Corporation and Officer agree as follows:
l. INDEMNIFICATION.
(a) Corporation will indemnify Officer to the fullest extent permitted
under applicable law if Officer was or is a party or threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding of any kind, whether civil, criminal, administrative or
investigative and whether formal or informal (including actions by or
in the right of Corporation and any preliminary inquiry or claim by
any person or authority), by reason of the fact that Officer is or was
a director, officer, partner, trustee, employee or agent of
Corporation or is or was serving at Corporation's request as a
director, officer, employee or agent of another corporation (including
a Subsidiary (as defined in paragraph 15 below)), limited liability
company, partnership, joint venture, trust, employee benefit plan or
other enterprise, whether or not for profit, or by reason of anything
done or not done by Officer in any such capacity (collectively,
"Covered Matters"). Such indemnification will cover all Expenses (as
defined in paragraph 2 below), liabilities, judgments (including
punitive and exemplary damages), penalties, fines (including excise
taxes relating to employee benefit plans and civil penalties) and
amounts paid in settlement which are incurred or imposed upon Officer
in connection with a Covered Matter (collectively, "Indemnified
Amounts").
(b) If Officer is entitled under this Agreement to indemnification for
less than all of the amounts incurred by Officer in connection with a
Covered Matter, Corporation will indemnify Officer for the
indemnifiable amount.
2. ADVANCE OF EXPENSES. Before final adjudication of a Covered Matter, upon
Officer's request pursuant to paragraph 3 below, Corporation will promptly
either advance Expenses directly or reimburse Officer for all Expenses to
the fullest extent permitted under applicable law. As used in this
Agreement, "Expenses" means all costs and expenses (including attorneys'
fees, expert fees, other professional fees and court costs) incurred by
Officer in connection with a Covered Matter other than judgments,
penalties, fines and settlement amounts.
3. CLAIMS FOR INDEMNIFICATION. Officer will give Corporation written notice of
any claim for indemnification under this Agreement. Payment requests will
include a schedule setting forth in reasonable detail the amount requested
and will be accompanied (or, if necessary, followed) by copies of the
relevant invoices or other documentation. Upon Corporation's request,
Officer will provide Corporation with a copy of the document or pleading,
if any, notifying Officer of the Covered Matter. To the extent practicable,
Corporation will pay Indemnified Amounts directly without requiring Officer
to make any prior payment.
4. DEFENSE OF CLAIM.
(a) Except as provided in paragraph 4(c) below, Corporation, jointly with
any other indemnifying party, will be entitled to assume the defense
of any Covered Matter as to which Officer requests indemnification.
(b) Counsel selected by Corporation to defend any Covered Matter will be
subject to Officer's advance written approval, which will not be
unreasonably withheld.
(c) Officer may employ Officer's own counsel in a Covered Matter and be
fully reimbursed therefor if (1) Corporation approves, in writing, the
employment of such counsel or (2) either (A) Officer has reasonably
concluded that there may be a conflict of interest between Corporation
and Officer or between Officer and other parties represented by
counsel employed by Corporation to represent Officer in such action or
(B) Corporation has not employed counsel reasonably satisfactory to
Officer to assume the defense of such Covered Matter promptly after
Officer's request.
(d) Neither Corporation nor Officer will settle any Covered Matter without
the other's written consent, which will not be unreasonably withheld.
5. D&O INSURANCE. The parties will cooperate to obtain advances of Expenses,
indemnification payments and consents from insurance carriers in any
Covered Matter to the full extent of any applicable directors and officers
liability insurance ("D&O Insurance"). Amounts paid directly to Officer
with respect to a Covered Matter by D&O Insurance carriers will be credited
to the amounts payable by Corporation to Officer under this Agreement.
6. RIGHTS NOT EXCLUSIVE. The indemnification provided to Officer under this
Agreement will be in addition to any indemnification provided to Officer by
any law, agreement, Board resolution, provision of the Articles of
Incorporation or Bylaws of Corporation or otherwise.
7. SUBROGATION. Upon payment of any Indemnified Amount under this Agreement,
Corporation will be subrogated to the extent of such payment to all of
Officer's rights of recovery therefor and Officer will take all reasonable
actions requested by Corporation (at no cost or penalty to Officer) to
secure Corporation's rights under this paragraph 7 including executing
documents.
8. CONTINUATION OF INDEMNITY. All of Corporation's obligations under this
Agreement will continue as long as Officer is subject to any actual or
possible Covered Matter, notwithstanding Officer's termination of service
as an officer of Corporation.
9. AMENDMENTS. Neither Corporation's Articles of Incorporation nor its Bylaws
will be changed to increase liability of Officer or to limit Officer's
indemnification. Any repeal or modification of Corporation's Articles of
Incorporation or Bylaws or any repeal or modification of the relevant
provisions of any applicable law will not in any way diminish any of
Officer's rights or Corporation's obligations under this Agreement. This
Agreement cannot be amended except with the written consent of Corporation
and Officer.
10. GOVERNING LAW. This Agreement will be governed by Michigan Law.
11. SUCCESSORS.
(a) This Agreement will be binding upon and inure to the benefit of the
parties and their respective heirs, legal representatives and assigns.
(b) Corporation will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the business or assets of the Corporation to assume all of
Corporation's obligations under this Agreement. Such assumption will
not release Corporation from its obligations under this Agreement.
12. SEVERABILITY. The provisions of this Agreement will be deemed severable,
and if any part of any provision is held illegal, void or invalid under
applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding.
If any provision of this Agreement is held illegal, void or invalid in its
entirety, the remaining provisions of this Agreement will not in any way be
affected or impaired but will remain binding in accordance with their
terms.
13. NOTICES. All notices given under this Agreement will be in writing and
delivered either personally, by registered or certified mail (return
receipt requested, postage prepaid), by recognized overnight courier or by
telecopy (if promptly followed by a copy delivered personally, by
registered or certified mail or overnight courier), as follows:
If to Officer: Xxxxx X. Xxxxxx
0000 Xxxxx
Xxxxx Xxx, Xxxxxxxx 00000
If to Corporation: JPE, Inc.
000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Secretary
or to such other address as either party furnishes to the other in writing.
14. COUNTERPARTS. This Agreement may be signed in counterpart.
15. SUBSIDIARIES. As used in this Agreement, the term "Subsidiary" means any
corporation in which Corporation owns a majority interest.
16. NO CONTRACT OF EMPLOYMENT. This Agreement does not confer upon Officer any
right with respect to continued employment with Corporation. Unless Officer
has a written employment agreement which expressly provides otherwise,
Officer's employment with Corporation and its Subsidiaries and affiliates
is "at will" and may be terminated by either Officer or Corporation (or any
Subsidiary or affiliate) at any time with or without cause, notice or
reason.
In witness whereof, the parties have executed this Agreement on the date set
forth in the introductory paragraph of this Agreement.
JPE, INC.
a Michigan corporation
By: /s/ Xxxxxxx X. Chrysler
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Xxxxxxx X. Chrysler
Its: President and Chief Executive Officer
/s/ Xxxxx X. Xxxxxx ("Officer")
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Xxxxx X. Xxxxxx
