Exhibit 10.6
INDEMNIFICATION AGREEMENT
This Agreement is between NN, Inc. and ___________. In this Agreement,
"NN," "we" or "us" refers to NN, Inc. and "you" refers to ________________. The
glossary attached as Exhibit "A" defines certain other capitalized terms used in
this Agreement.
1. Date.
This Agreement is effective as of _______________.
2. Purpose of the Agreement.
We desire to attract and retain your services as a NN director or
officer. We recognize, however, that you might be concerned because directors
and officers are sometimes named as parties in expensive litigation. To help
alleviate that concern and to induce you to serve, we agree to indemnify you for
certain expenses potentially resulting from such litigation. We also agree to
use reasonable efforts to maintain directors' and officers' insurance for your
benefit.
3. Agreement to Serve.
You agree to serve or to continue to serve as NN's _____________ until
you are no longer duly appointed, elected or qualified or until you resign.
4. Directors' and Officers' Insurance.
We agree to use reasonable efforts to maintain one or more enforceable
policies of directors' and officers' insurance for your benefit. The insurance
will provide coverage in amounts which our Board of Directors determines to be
reasonable. Our obligation to maintain insurance ends when you are no longer
serving NN in your present capacity and there is no reasonable possibility that
someone will xxx you based on your prior service to NN in that capacity. Our
obligation to maintain insurance will also cease if such insurance is not
reasonably available or if our Board of Directors determines that the cost of
providing the insurance exceeds its benefits.
5. Agreement to Indemnify.
Subject to the limitations set forth in Section 7 of this Agreement,
we agree to indemnify you for your expenses resulting from a threatened, pending
or completed Proceeding, including any Proceeding by or in the right of NN, if
you meet the following requirements:
. You are (or at the time in question were) serving as our Agent,
or as the Agent of another entity at our request;
. You acted in good faith and in a manner you reasonably believed
to be in (or not opposed to) our best interests;
. You had no reason to believe your conduct was unlawful (if the
Proceeding against you is criminal); and
. Delaware law does not prohibit us from indemnifying you.
6. Advancement of Expenses.
Subject to the limitations set forth in Section 7 of the Agreement and
subject to the following conditions, we will advance all costs and expenses you
reasonably incur in connection with the investigation, defense, settlement or
appeal of any Proceeding upon receipt from you of:
. Your written affirmation of your good faith belief that you have
met the standard of conduct necessary for indemnification set
forth in Section 5 of this Agreement; and
. Your undertaking (or an undertaking on your behalf) to repay all
amounts so advanced if a court having final jurisdiction
determines that you are not entitled to indemnification for such
expenses under this Agreement or otherwise.
7. Limitation of Indemnity.
Notwithstanding anything to the contrary contained in Section 5,
Section 6 or any other section of this Agreement, we will not indemnify you or
advance expenses in connection with a Proceeding which you initiated unless our
Board of Directors authorized the Proceeding (or any part thereof). We also will
not indemnify you:
. to the extent that payment is made to you or on your behalf under
a valid and collectible insurance policy;
. to the extent that you receive payment other than under this
Agreement;
. with respect to directors' acts or omissions for which our
Certificate of Incorporation may not limit liability under
Delaware law; or
. if a court having final jurisdiction determines in a final
decision that such indemnification is not lawful.
8. Notification of Right to Indemnification.
You agree to notify us promptly after your receipt of notice that a
Proceeding has been brought (or is threatened to be brought) against you. If
your failure to notify us promptly prejudices us in our defense of a Proceeding,
we will be relieved of liability under this Agreement to the extent of the
prejudice.
9. Notice to Insurer.
If we have directors' and officers' liability insurance in effect at
the time we receive notice of a Proceeding from you, we will give prompt notice
to the insurer in accordance with the
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requirements of the insurance policy. We will take all necessary or desirable
action to cause the insurer to pay all amounts owed under the terms of the
policy.
10. Determination of Right to Indemnification.
Subject to the limitations set forth in Section 7 of this Agreement,
we agree to indemnify you if you meet the requirements for indemnification set
forth in Section 5 of this Agreement. We will determine whether you meet those
requirements using one of the following three methods:
. by a majority vote of directors who are not parties to the
Proceeding, (the "Disinterested Directors") regardless of whether
there are enough such directors to constitute a quorum);
. by written opinion of Independent Legal Counsel; in the event
there are no Disinterested Directors or if the Disinterested
Directors so choose; or
. by vote of our stockholders.
If Independent Legal Counsel determines your entitlement to indemnification
under this Section 10, we will pay all reasonable fees and expenses incurred by
such counsel in connection with such determination.
The persons determining your entitlement to indemnification will
presume that you are entitled to indemnification. The termination of any
Proceeding by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or the equivalent, will not create a presumption that you did not act
in good faith and in a manner you believed to be in (or not opposed to) our best
interests. Such a termination also will not create a presumption that you had
reasonable cause to believe that your conduct was unlawful.
Following our determination of your entitlement to indemnification,
our Secretary or another corporate officer will notify you in writing of such
determination. If we determine that you are not entitled to indemnification, you
may pursue the remedies provided by Section 14 of this Agreement.
11. Payment of Indemnification.
If we determine that you are entitled to indemnification, we will pay
all costs and expenses you reasonably incurred in connection with the Proceeding
in question. In addition, we will pay all expenses you reasonably incurred in
cooperating with the persons responsible for determining your right to
indemnification, regardless of whether we determine that you are entitled to
indemnification.
Our obligations to make payments under this Agreement are not subject
to diminution by set off, counterclaim, abatement or otherwise. However, you
will not be released from any liability or obligation that you may owe us,
whether under this Agreement or otherwise.
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12. Assumption of Defense.
If we are required to pay the costs of any Proceeding brought against
you, we shall have the right to assume the defense of such Proceeding, with
counsel approved by you, upon delivery to you of written notice of our election
to assume the defense. Notwithstanding the foregoing, however, we shall not have
the right to assume your defense in any Proceeding brought by or in the right of
NN or as to which you have reasonably concluded that there is a conflict of
interest between you and us in the conduct of the defense.
After we have delivered notice to you that we intend to assume the
defense of a Proceeding, you will have the right to employ separate counsel at
your expense. We will not be liable to you under this Agreement for any fees of
counsel you subsequently incur with respect to the Proceeding, unless:
. We previously have authorized you to employ separate counsel at
our expense;
. You reasonably have concluded that there is a conflict of
interest between you and us in the conduct of your defense; or
. We have failed to employ counsel to assume your defense in such
Proceeding.
13. Cooperation and Settlement of Claim.
You agree to give us such information and cooperation as we may
reasonably request in defense of any claim or threat of a claim.
You agree that we are not obligated to indemnify you under this
Agreement for any amounts you pay to settle any action or claim without our
prior written consent. We agree not to settle any action or claim in any manner
that will impose any penalty or limitation on you without your prior written
consent.
Each party to this Agreement agrees not to unreasonably withhold
consent to any proposed settlement. If either party refuses to agree to a
proposed settlement acceptable to the other party, NN will retain Independent
Legal Counsel reasonably acceptable to you for the purpose of determining
whether the proposed settlement is reasonable under the circumstances. NN will
pay all reasonable fees and expenses incurred by Independent Legal Counsel in
connection with such determination. If Independent Legal Counsel determines that
the proposed settlement is reasonable under all the circumstances, the party
advocating the settlement may consummate the settlement without the consent of
the other party.
14. Your Remedies.
If we fail to honor our obligations under Section 6 of this Agreement,
or if we determine that you are not entitled to indemnification under this
Agreement, you may seek (a) an adjudication in an appropriate court in the State
of Delaware or in any other court of competent jurisdiction, or (b) an award in
arbitration to be conducted by a single arbitrator under the rules of the
American Arbitration Association, for the purpose of enforcing your rights under
this Agreement. However, you may not seek such an adjudication or arbitration
later than 180 days
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following the earlier of (x) the date of notice of a determination that you are
not entitled to indemnification, or (y) the date 60 days after we receive your
request for indemnification.
Any judicial proceeding or arbitration commenced under this Section 14
shall be conducted de novo and without presumption that you are not entitled to
indemnification.
If the court or arbitrator determines that you are entitled to
indemnification, we shall be bound by such determination, unless:
. You have misstated a material fact or omitted a material fact
necessary to make your statements in connection with the request
for indemnification not misleading; or
. Applicable law prohibits us from indemnifying you.
In addition, we will pay your reasonable expenses incurred in successfully
establishing your right to indemnification or advancement of expenses in any
action (or settlement thereof) under this Section 14.
We shall be precluded from asserting in any judicial proceeding or
arbitration commenced under this Section 14 that the procedures and presumptions
set forth in this Agreement are not enforceable. We agree to stipulate in any
such court or before any such arbitrator that we are bound by all of the
provisions of this Agreement.
15. Notice.
All notices, requests, demands and other communications relating to
this Agreement shall be in writing and shall be deemed to be duly given if (a)
delivered by hand and receipted for by the party to whom the notice or
communication was directed, or (b) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it was so
mailed:
if to you, to:
_____________________
_____________________
_____________________
or to such other address as you furnish us, and
if to NN, to:
NN, Inc.
0000 Xxxxx'x Xxxx Xxxxx
Xxxxxxxx X, Xxxxx 00
Xxxxxxx Xxxx, XX 00000
Attention: Secretary/Assistant Secretary
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With a copy to:
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxx
or to such other address as we furnish you.
16. Severability.
If a court of competent jurisdiction determines that any portion of the
Agreement is unenforceable, we will nevertheless indemnify you to the full
extent permitted by the enforceable portions of the Agreement. The invalidity or
unenforceability of any provision(s) of this Agreement will not affect the
enforceability of the Agreement's other provisions.
17. Modification and Waiver.
Any supplement, modification or amendment to this Agreement will be binding
only if both parties have executed it.
If either party waives any of the provisions of this Agreement, such waiver
will be effective only as to the particular provision and matter expressly
waived.
18. Continuation of Indemnity.
Our obligations under this Agreement shall continue during the period in
which (a) you are (or have consented to be) an Agent of NN, or (b) are serving
as an Agent of another corporation, partnership, joint venture, trust or other
enterprise at our request. Our obligations shall also continue for as long as
you are subject to any possible claim or threatened, pending or competed
Proceeding by reason of your service in such capacity.
19. Binding Effect.
This Agreement binds us and our successors and assigns. This Agreement
inures to the benefit of you and your heirs, assigns and personal
representatives.
20. Non-Exclusivity.
The indemnification to which you are entitled under this Agreement is not
exclusive of any other indemnification to which you are or may be entitled.
21. Subrogation Rights.
If we pay any amounts under this Agreement, we will be subrogated to the
extent of such payment to your rights of recovery against any person or
organization. You agree to execute all papers required and to do everything that
may be reasonably necessary to secure such rights for us.
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22. Agreement to Supersede.
This Agreement supersedes any other prior written indemnification agreement
between you and us.
23. Governing Law.
This Agreement shall be construed, enforced and governed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed in that state.
24. Counterparts.
The parties may execute any number of counterparts of this Agreement, each
of which will be an original.
25. Headings.
The headings of the paragraphs in this Agreement are for convenience only.
They do not constitute part of the Agreement and do not affect the construction
of it.
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IN WITNESS WHEREOF, The parties have executed this Agreement as of the day
and year first above written.
NN, INC.
________________________________
By: ____________________________
Title:__________________________
[INDIVIDUAL]
________________________________
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Exhibit "A"
Glossary
"Agent"
"Agent" means:
. any person who is or was a director, officer, employee, agent or
fiduciary of NN or a subsidiary of NN; or
. any person who is or was serving as a director, officer, employee,
agent or fiduciary of another corporation, partnership, joint venture,
trust or other enterprise or entity (including service with respect to
an employee benefit plan), if such service is or was at the request
of, or for the convenience of, or to represent the interests of, NN or
a subsidiary of NN.
"Expenses"
"Expenses" are all direct and indirect costs of any type or nature which
you actually and reasonably incur in connection with the investigation, defense
or appeal of a Proceeding or establishing or enforcing a right to
indemnification under the Agreement, Delaware corporation law or otherwise.
"Expenses" include, without limitation, all attorneys' fees and related
disbursements, other out-of-pocket costs and reasonable compensation for time
spent by you for which you are not otherwise compensated by us or any third
party. "Expenses" also include all judgments, fines, and Employee Retirement
Income Security Act excise taxes or penalties.
"Independent Legal Counsel"
"Independent Legal Counsel" means a law firm, a member of a law firm, or an
independent practitioner that is experienced in matters of corporation law and
does not have a conflict of interest (under applicable standards of professional
conduct) in representing either NN or you in an action to determine your rights
under this Agreement.
"Proceeding"
"Proceeding" means any threatened, pending or completed action, suit or
other proceeding, whether civil, criminal, administrative, investigative or of
another type to which you are a party or are threatened to be made a party, or
are otherwise involved, including involvement as a witness.
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