INDEMNIFICATION AGREEMENT
EXHIBIT
10.1
This
Indemnification Agreement (the “Agreement”) is made as of the
15th day of January 2009, by and between La-Z-Boy Incorporated, a Michigan
corporation (the “Corporation”), and [Name of
Director] (the “Indemnitee”).
BACKGROUND
Indemnitee
is a member of the Board of Directors and as such performs a valuable service
for the Corporation. To induce Indemnitee to continue to serve on the Board of
Directors, the Corporation has agreed to provide to Indemnitee the
indemnifications and other rights described herein.
The
Corporation’s Articles of Incorporation and Bylaws require indemnification of
the officers and directors of the Corporation. The Corporation enters into this
Agreement pursuant to the Corporation’s Articles of Incorporation and Bylaws and
the provisions of the Michigan Business Corporation Act (the “Act”).
This
Agreement is a supplement to and in furtherance of the Articles of Incorporation
and Bylaws of the Corporation and any resolutions adopted pursuant thereto, and
shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder.
Indemnitee
does not regard the protection available under the Corporation’s Articles of
Incorporation, Bylaws and insurance as adequate in the present circumstances,
and may not be willing to continue to serve as a director without adequate
protection, and the Corporation desires Indemnitee to serve in such capacity.
Indemnitee is willing to serve, continue to serve and to take on additional
service for or on behalf of the Corporation on the condition that he be so
indemnified.
THEREFORE,
in consideration of the foregoing, the service of Indemnitee after the date of
this Agreement and the terms and conditions set forth herein, the parties agree
as follows:
TERMS OF
AGREEMENT
Section 1. Indemnification
for Claims by Third Parties.
The
Corporation shall, to the fullest extent authorized or permitted by the Act or
other applicable law, as the same presently exist or may hereafter be amended,
but, in the case of any such amendment, only to the extent such amendment
permits the Corporation to provide broader indemnification rights than before
such amendment, indemnify Indemnitee who was or is a party or is threatened to
be made a party to a threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative and
whether formal or informal, other than an action by or in the right of the
Corporation, by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, partner, trustee, employee,
or agent of another foreign or domestic corporation, partnership, joint venture,
trust, or other enterprise, whether for profit or not, against expenses,
including attorneys’ fees, judgments, penalties, fines, and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with the
action, suit, or proceeding.
Section 2.
Indemnification for
Claims Brought by or in the Right of the Corporation.
The
Corporation shall, to the fullest extent authorized or permitted by the Act or
other applicable law, as the same presently exist or may hereafter be amended,
but, in the case of any such amendment, only to the extent such amendment
permits the Corporation to provide broader indemnification rights than before
such amendment, indemnify Indemnitee who was or is a party to or is threatened
to be made a party to a threatened, pending, or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that Indemnitee is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, or other enterprise,
whether for profit or not, against expenses, including actual and reasonable
attorneys’ fees, and amounts paid in settlement incurred by Indemnitee in
connection with the action or suit.
Section 3. Other
Rights of Indemnification.
A. The
indemnification and advancement of expenses provided in this Agreement are not
exclusive of other rights to which a person seeking indemnification or
advancement of expenses may be entitled under the Act, Articles of
Incorporation, Bylaws, or other agreement. However, the total amount of expenses
advanced or indemnified from all sources combined shall not exceed the amount of
actual expenses incurred by the person seeking indemnification or advancement of
expenses.
B.
Notwithstanding any other provision of this Agreement, the Corporation hereby
indemnifies and holds Indemnitee harmless for all reasonable expenses in
connection with the preparation to serve or service as a witness in any claim in
which Indemnitee is not a party, if such actual or proposed service arose by
reason of the fact that Indemnitee is or was a director, officer, employee, or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust or employee benefit
plan.
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Section 4. Actions
Brought by Indemnitee.
Notwithstanding
the provisions of Sections 1 and 2 of this Agreement, the Corporation shall not
be required to indemnify an Indemnitee in connection with an action, suit,
proceeding or claim (or part thereof) brought or made by such Indemnitee except
as otherwise provided herein with respect to the enforcement of this Agreement,
unless such action, suit, proceeding or claim (or part thereof) was authorized
by the Board of Directors of the Corporation.
Section 5. Court
Approval.
Indemnification
shall not be made under Section 2 for a claim, issue, or matter in which
Indemnitee has been adjudged liable to the Corporation unless and only to the
extent that in the final disposition of the action, suit or proceeding by the
court in which the action or suit was brought has determined upon application
that, despite the adjudication of liability but in view of all circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnification for
expenses incurred.
Section 6. Partial
Indemnification.
If an
Indemnitee is entitled to indemnification under either Section 1 or Section 2
for a portion of expenses including attorneys’ fees, judgments, penalties, fines
and amounts paid in settlement, but not for the total amount thereof, the
Corporation shall indemnify Indemnitee for the portion of the expenses,
judgments, penalties, fines or amounts paid in settlement for which Indemnitee
is entitled to be indemnified.
Section 7. Continuation
and Termination of Indemnity.
The
indemnification provided for in this Agreement continues as to Indemnitee after
Indemnitee ceases to be a director, officer, employee or agent and shall inure
to the benefit of the heirs, personal representatives and administrators of
Indemnitee. The obligations of the Corporation hereunder shall continue during
the period Indemnitee is a director, officer, employee or agent of the
Corporation, or is serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, and continue thereafter so
long as Indemnitee may be subject to any possible claim or threatened, pending
or completed action, suit or proceeding, whether civil, criminal or
investigative, by reason of the fact of his or her service in any such capacity,
but in no event for less than ten (10) years. Notwithstanding anything herein to
the contrary, in the event that Indemnitee is removed as a director of the
Corporation by the Corporation’s shareholders for cause or by court order for
cause, in either case, within the meaning and as provided in, Sections 511 and
514 of the Act, then this Agreement shall terminate immediately and be of no
further force or effect.
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Section 8. Notification
and Defense of Claim.
With
respect to any claim to be made hereunder for indemnification:
A.
Indemnitee shall promptly provide written notice to the Corporation of any
action, suit or proceeding; provided, however, the failure
to do so will not relieve the Corporation from any liability arising
hereunder.
B.
Indemnitee shall provide to the Corporation, upon advance request, any
documentation or information available to Indemnitee and necessary or useful to
the Corporation with respect to any such claim for indemnification.
C. With
respect to any such action, suit or proceeding as to which Indemnitee notifies
the Corporation: (a) the Corporation will be entitled to participate therein at
its own expense; and (b) except as otherwise provided below, to the extent that
it may wish, the Corporation, jointly with any other indemnifying party or
otherwise, will be entitled to assume the defense thereof, with counsel
satisfactory to Indemnitee. The Corporation shall give Indemnitee written notice
of its election to assume the defense thereof within (30) days after a written
claim has been received by the Corporation, and thereafter it shall not be
liable to Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by Indemnitee in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below. Such
assumption of the defense by the Corporation shall constitute its
acknowledgement that this Agreement, and the rights and benefits of Indemnitee
hereunder, including the presumptions contained in Section 9.B. hereof, shall
apply to such action, suit or proceeding and any related action, suit or
proceeding. After the assumption of the defense by the Corporation, Indemnitee
shall have the right to employ his or her own counsel in such action, suit or
proceeding, but the fees and expenses thereof shall be at the expense of
Indemnitee unless (i) the employment of counsel by Indemnitee has been
authorized by the Corporation, or (ii) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Corporation and
Indemnitee in the conduct of the defense of such action.
D. The
Corporation shall not be liable to indemnify Indemnitee under this Agreement for
any amounts paid in settlement of any action or claim effected without its
written consent. The Corporation shall not settle any action or claim in any
manner which would impose any penalty or limitation on Indemnitee without his or
her written consent. Neither the Corporation nor Indemnitee will unreasonably
withhold their consent to any proposed settlement.
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Section 9. Mandatory
Indemnification; Presumption of Entitlement.
A.
Indemnification by the Corporation under Section 1 of this Agreement, and for
expenses, including, without limitation, attorneys’ fees actually incurred under
Section 2 of this Agreement, shall be mandatory and paid to the full extent
provided in this Agreement, without the need or necessity of a determination
that Indemnitee has met any standard of conduct, unless, in a final disposition
of an action, suit, or proceeding concerning the matter for which
indemnification is sought by Indemnitee, Indemnitee is adjudged or found to
have:
(a)
received a financial benefit to which he was not entitled;
(b)
intentionally inflicted harm on the Corporation or its
shareholders;
(c)
violated Section 551 of the Act; or
(d)
intentionally committed a criminal act.
B. In
connection with any process or proceeding, whether judicial, quasi judicial or
engaged in pursuant to Section 564a of the Act, concerning Indemnitee’s
entitlement to indemnification, it shall be presumed that Indemnitee (a) is
entitled to the indemnification provided under this Agreement, (b) has at all
times acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and (c) has not engaged in or
been a party to any of the conduct described in Subsection A of this Section 9.
The termination of an action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, will not alter
or affect such presumption that Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Corporation or its shareholders, and, with respect to a criminal action or
proceeding, that Indemnitee’s conduct was lawful.
Section 10. Advancement
of Expenses.
Expenses
incurred in defending a civil or criminal action, suit, or proceeding described
in Sections 1 or 2 of this Agreement shall be paid by the Corporation in advance
of the final disposition of the action, suit, or proceeding upon receipt of an
undertaking by or on behalf of Indemnitee to repay the expenses, without
interest, if upon the final disposition of the action, suit, or proceeding it is
determined that Indemnitee is not entitled to be indemnified by the Corporation.
The undertaking shall be by unlimited general obligation of the person on whose
behalf advances are made but need not be secured. Claims made by Indemnitee
under this Section 10, shall be paid in full by the Corporation within ten (10)
days after a written claim has been received by the Corporation. With respect to
any matter for which Indemnitee seeks advancement of expenses, a written request
for advancement of expenses by Indemnitee shall be made only once for such
matter, and all invoices relating to such matter whether included with
Indemnitee’s request for advancement of expenses, or submitted to the
Corporation subsequent thereto, shall be paid in accordance with this Section
10.
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Section 11. Enforcement;
Remedies of Indemnitee.
A. If
Indemnitee makes a claim for indemnification under this Agreement, including,
without limitation, a claim for advancement of expenses, and any such claim is
not paid-in-full to Indemnitee within thirty (30) days after a written claim has
been received by the Corporation in accordance with Section 10 of this
Agreement, Indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim.
B.
Indemnitee shall be entitled to an adjudication in an appropriate court located
in or serving Monroe County in the State of Michigan of his entitlement to such
indemnification or advancement of expenses. Alternatively, Indemnitee, at his or
her option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the commercial rules of the American Arbitration
Association to be conducted in the State of Michigan. Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration within 180
days following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 11. The Corporation shall not oppose
Indemnitee’s right to seek any such adjudication or award in
arbitration.
C. In the
event that the Corporation asserts that Indemnitee is not entitled to
indemnification due to conduct described in Section 9A of this Agreement, any
judicial proceeding or arbitration commenced pursuant to this Section 11 shall
be conducted in all respects as a de novo trial or arbitration on the merits and
Indemnitee shall not be prejudiced by reason of the Corporation’s
assertion.
D. The
Corporation shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 11 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Corporation
is bound by all the provisions of this Agreement.
E. In the
event that Indemnitee, pursuant to this Section 11, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee shall be entitled to
recover from the Corporation, and shall be indemnified by the Corporation
against, any and all expenses actually and reasonably incurred in such judicial
adjudication or arbitration, but only if Indemnitee prevails therein. If it
shall be determined in said judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the indemnification or advancement of
expenses sought, the expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be appropriately
prorated.
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Section 12. Miscellaneous
Provisions.
A. Benefit and
Assignment. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, assigns, heirs and legal
representatives. No party may assign any rights or duties under this Agreement
without the prior written consent of the other party.
B. Entire Agreement and
Amendment. Subject to the provisions of Section 3 hereof, this writing
contains the entire agreement between the parties with respect to the matters
described herein and is a complete statement as to the terms thereof and
supersedes all previous agreements. This Agreement may not be altered or
modified or terminated except by a writing signed by the parties
hereto.
C. Severability. Each
and every paragraph, sentence, term and provision of this Agreement shall be
considered severable in that, in the event that a court finds any paragraph,
sentence, term or provision to be invalid or unenforceable, the validity and
enforceability, operation, or effect of the remaining paragraphs, sentences,
terms or provisions shall not be affected, and this Agreement shall be construed
in all respects as if such invalid or unenforceable matter had been omitted. In
any event, notwithstanding any court finding of invalidity or unenforceability,
Indemnitee shall be entitled to the indemnifications and other rights provided
in Sections 561 to 569 of the Act, the Corporation’s Articles of Incorporation,
its Bylaws and otherwise.
D. Waiver. The failure
of either party at any time to require performance by the other party of any
provision of this Agreement shall not be deemed a continuing waiver of that
provision or a waiver of any other provision of this Agreement and shall in no
way affect the full right to require such performance from the other party at
any time thereafter.
E. Notices. Notices
required under this Agreement shall be given in writing and shall be deemed
given when delivered in person or, if sent by certified or registered mail,
return receipt requested, postage prepaid, at the time of the certification or
registration thereof.
F. Definitions. For
purposes of this Agreement:
(a)
“other enterprises”
shall include employee benefit plans.
(b)
“fines” shall include
any excise taxes assessed on a person with respect to an employee benefit
plan.
(c)
“serving at the request of the
Corporation” shall include any service as a director, officer, employee,
or agent of the Corporation which imposes duties on, or involves services by,
the director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good faith
and in a manner he or she reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be considered
to have acted in a manner “not opposed to the best interests of the corporation
or its shareholders” as referred to in Sections 561 and 562 of the
Act.
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(d)
“final disposition of the
action, suit, or proceeding” shall mean the entry of an order or judgment
disposing of the matter from which (i) there is no right of appeal, or (ii) the
time for an appeal has expired.
G. Application to a Resulting
or Surviving Corporation or Constituent Corporation. The definition for
“corporation” found in Section 569 of the Act, as the same exists or may
hereafter be amended is, and shall be, specifically excluded from application to
this Agreement. The indemnification and other obligations of the Corporation set
forth in this Agreement shall be binding upon and assumed by any resulting or
surviving corporation after any acquisition, disposition, merger or
consolidation with the Corporation. Notwithstanding anything to the contrary
contained herein or in Section 569 of the Act, no person shall be entitled
to the indemnification and other rights set forth in this Agreement for acting
as a director or officer of another corporation prior to such other corporation
entering into a merger or consolidation with the corporation.
H. Non-Exclusivity; Survival of
Rights; Insurance.
(a) The
rights of indemnification and advancement of expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Corporation’s Articles of
Incorporation, or Bylaws, or any agreement, vote of stockholders, resolution of
directors or otherwise, of the Corporation. No amendment, alteration or repeal
of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee prior to such amendment, alteration or repeal. To the extent
that a change in the Act, whether by statute or judicial decision, permits
greater indemnification than would be afforded currently under the Corporation’s
Articles of Incorporation, or Bylaws and 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. No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right and
remedy shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other right or
remedy.
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(b)
Regardless of whether or not the Corporation would have the power to indemnify
such person against such liability under the pertinent provisions of the Act, to
the extent that the Corporation maintains, purchases, pays for, or maintains an
insurance policy or policies providing liability insurance for directors,
officers, employees, or agents or fiduciaries of the Corporation, Indemnitee
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any director, officer,
employee, agent or fiduciary under such policy or policies, both during the
period Indemnitee serves as an officer, director, employee or agent of the
Corporation and thereafter for the maximum period contemplated in Section 7 of
this Agreement, and if, at the time of the receipt of a notice of a claim
pursuant to the terms hereof, the Corporation has director and officer liability
insurance in effect, the Corporation shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Corporation shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
I. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.
J. Governing Law.
Michigan law shall govern the construction and enforceability of this
Agreement.
(Signatures
on following page)
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first written above.
CORPORATION:
La-Z-Boy
Incorporated
a
Michigan corporation
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Its:
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La-Z-Boy
Incorporated
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0000
X. Xxxxxxxxx
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Xxxxxx,
XX 00000
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INDEMNITEE:
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[name]
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Address
for notices:
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