EXHIBIT 10.4
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated April 14, 1997 (the "Agreement"),
between XXXXXX PRODUCTS LTD., a Delaware corporation (the "Corporation"), and
Xxxxxxx X. Xxxxx an officer of the Corporation (the "Indemnitee").
WHEREAS, the ability to attract and retain competent and experienced
persons to serve as directors and officers of the Corporation is in the best
interests of the Corporation and its stockholders, and the Corporation's ability
to attract and retain such persons will be enhanced by providing both its
current and prospective directors and officers with indemnification agreements
as permitted by Delaware law so that such persons will be willing to serve or
continue to serve the Corporation;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. GENERAL INDEMNIFICATION. It is the intention of the parties
hereto that the Corporation shall be required to indemnify the Indemnitee to the
fullest extent permitted by the law (both statutory and common) of the State of
Delaware as now or hereafter in effect. Therefore, in addition to the
indemnification and advancement of expenses specifically provided elsewhere
herein, the Corporation shall indemnify and hold the Indemnitee harmless in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, and including any
action brought by or in the right of the Corporation, to which the Indemnitee
is, was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that he is or was or has agreed to become a director,
officer, employee or agent of the Corporation, or is or was serving or has
agreed to serve at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in any such capacity, against all costs, charges, expenses (including
attorneys' fees and costs), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with such
action, suit or proceeding and any appeal therefrom, to the fullest extent then
permitted by the law (both statutory and common) of the State of Delaware as now
or hereafter in effect, notwithstanding that such indemnification is not
specifically mandated or authorized by the other provisions of this Agreement,
the Corporation's By-Laws or Certificate of Incorporation or otherwise and
notwithstanding that the legal basis for such indemnification may have arisen
subsequent to the act, occurrence or omission with respect to which
indemnification is being sought.
Section 2. THIRD PARTY ACTIONS. The Corporation shall indemnify and
hold the Indemnitee harmless in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation and
covered by Section 3 hereof) to which the Indemnitee is, was or at any time
becomes a party, or is threatened to be made a party, by reason of the fact that
he is or was or has agreed to become a director, officer, employee or agent of
the Corporation, or is or was serving or has agreed to serve at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action alleged to have been taken or omitted in any such capacity,
against all costs, charges, expenses (including attorneys' fees and costs),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or on his behalf in connection with such action, suit or proceeding and
any appeal therefrom, if the Indemnitee 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, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful.
Section 3. ACTIONS IN RIGHT OF CORPORATION. The Corporation shall
indemnify and hold the Indemnitee harmless in connection with any threatened,
pending or completed action, suit or proceeding, brought by or in the right of
the Corporation to procure a judgment in the Corporation's favor, to which the
Indemnitee is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that he is or was or has agreed to become a
director, officer, employee or agent of the Corporation, or is or was serving or
has agreed to serve at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in any such capacity, against all costs, charges and expenses (including
attorneys' fees and costs) actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom, if the Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which the Indemnitee shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action, suit or proceeding was
brought shall determine upon application that, despite the adjudication of such
liability but in view of all the circumstances of the case, the Indemnitee is
fairly and reasonably entitled to indemnity for such costs, charges and expenses
which the Court of Chancery or such other court shall deem proper.
Section 4. PREVAILING PARTY. Notwithstanding anything herein to the
extent that the Indemnitee 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 Sections 2 or 3 hereof,
he shall be indemnified against all costs, charges and expenses (including
attorneys' fees and costs) actually and reasonably incurred by him or on his
behalf in connection therewith. In addition, to the extent that the Indemnitee
has been partially successful, on the merits or otherwise, including, without
limitation, the dismissal without prejudice, as to one or more but less than all
claims, issues or matters in any action, suit or proceeding referred to in
Sections 2 or 3 hereof, he shall be indemnified against all costs, charges and
expenses (including attorneys' fees and costs) actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter.
Section 5. NO PRESUMPTIONS. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
Section 6. ADVANCES; EXPENSES AS WITNESS.
(a) Costs, charges and expenses (including attorneys' fees and costs)
incurred by the Indemnitee in connection with any civil or criminal action, suit
or proceeding (including one brought by or in the right of the Corporation)
which might give rise to a right of indemnification hereunder shall be paid by
the Corporation in advance of the final disposition of such action, suit or
proceeding, provided, however, that the payment of such costs, charges and
expenses (including attorneys, fees and costs) incurred by the Indemnitee in his
capacity as a director or officer (and not in any other capacity) in advance of
the final disposition of such action, suit or proceeding shall be made only upon
receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts
so advanced in the event that it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified by the Corporation as authorized in
this Agreement. Any advancement of expenses pursuant to this Agreement shall be
made promptly and in any event within 15 days after receipt of written request
therefor from the Indemnitee, accompanied by any required undertaking.
(b) Notwithstanding any other provision of this Agreement, to the
extent that the Indemnitee is a witness in any action, suit or proceeding
referred to in Sections 2 or 3 and any appeal therefrom to which the Indemnitee
is not a party, the Corporation shall indemnify the Indemnitee against all
costs, charges and expenses (including attorneys' fees and costs) actually or
reasonably incurred by him or on his behalf in connection therewith.
Section 7. PROCEDURE.
(a) Any indemnification pursuant to this Agreement (unless ordered by a
court) shall be made by the Corporation promptly and in any event within 45 days
after receipt of a written
request therefor from the Indemnitee, unless a determination is made within such
45 day period (i) by the Board of Directors of the Corporation by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the vote of the holders of a majority
of the issued and outstanding shares of Common Stock of the Company, that
indemnification of the Indemnitee is not proper in the circumstances because he
has not met the applicable standard of conduct.
(b) The right to indemnification or advancement of expenses shall be
enforceable by the Indemnitee in any court of competent jurisdiction if the
Corporation denies such request, in whole or in part (including by failure to
act thereon) within 45 days after receipt of such written request (or, in the
case of advancements, within 15 days), it being the parties' intention that if
the Corporation denies the Indemnitee's request for indemnification, the
question of the Indemnitee's right thereto shall be for the court to decide. The
Indemnitee's costs and expenses incurred in connection with successfully
establishing his right to indemnification and advancements, in whole or in part,
in any such action shall also be indemnified by the Corporation. It shall be a
defense to any such action (other than an action brought to enforce a claim for
advancements where the required undertaking, if any, has been received by the
Corporation) that the Indemnitee has not met the applicable standard of conduct.
The burden of proving such defense shall be on the Corporation, and there shall
be a rebuttable presumption that the Indemnitee did not fail to meet such
applicable standard. Neither the failure of the Corporation (including its Board
of Directors, its independent legal counsel and its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
the Indemnitee is proper in the circumstances because he has met the applicable
standard of conduct, nor the fact that there has been an actual determination by
the Corporation (including its Board of Directors, its independent legal counsel
and its shareholders) that the Indemnitee has not met such applicable standard
of conduct, shall be a defense or sufficient to rebut such presumption that the
Indemnitee has met the applicable standard of conduct.
Section 8. NON-EXCLUSIVITY, ETC. The indemnification and advancement of
expenses provided by this Agreement shall not be deemed exclusive of any other
rights to which the Indemnitee may now or hereafter he entitled under any
present or future law (whether statutory or common), agreement, By-law,
provision of the Certificate of Incorporation, vote of shareholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in any other capacity while holding office or while employed by
or acting as agent of the Corporation. No amendment or repeal of any present or
future provision in the Corporation's Certificate of Incorporation or By-Laws
authorizing or requiring the indemnification of or advancements to the
Indemnitee in any such capacity, and which amendment or repeal would diminish
the Indemnitee's right of indemnification or to advancements in any respect
under such provision, shall be effective against the Indemnitee unless he shall
consent to such amendment or repeal in a signed writing or by the Indemnitee's
vote as a director or shareholder.
Section 9. SURVIVAL.
(a) The indemnification and advancement of expenses provisions hereof
shall continue
after the Indemnitee has ceased to be a director, officer, employee or agent of
the Corporation and shall inure to the benefit of the Indemnitee's estate,
heirs, executors and administrators.
(b) This Agreement shall be binding on the successors and assigns of
the Corporation including, without limitation, any transferee of all or
substantially all of its assets and any successor by merger, consolidation,
operation of law or otherwise.
Section 10. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled
pursuant hereto to Indemnification for some or a portion of the expenses,
judgments, fines, penalties or amounts paid in settlement, actually and
reasonably incurred by the Indemnitee but not for the total amount thereof, the
Corporation shall indemnify the Indemnitee for such portion thereof to which the
Indemnitee is entitled.
Section 11. EXCEPTIONS. Any other provisions herein to the contrary
notwithstanding, the Corporation shall not be obligated pursuant to the terms of
this Agreement:
(a) To indemnify or advance expenses to the Indemnitee with respect to
proceedings or claims initiated or brought voluntarily by the Indemnitee and not
by way of defense, except with respect to proceedings brought to establish or
enforce a right to indemnification under this Agreement or any other statute or
law or otherwise as required under Section 145 of the Delaware General
Corporation Law, but such indemnification or advancement of expenses may be
provided by the Corporation in specific cases if the Board of Directors finds it
to be appropriate
(b) To indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines or penalties, and
amounts paid in settlement) to the extent that such expenses or liabilities have
been paid directly to the Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance maintained by the Corporation.
(c) To indemnify the Indemnitee in connection with a suit or judgment
rendered for an accounting of profits arising from the purchase and sale by the
Indemnitee of securities pursuant to Section 16(b) of the Securities Exchange
Act of 1934, as amended, or any similar successor statute.
Section 12. SEVERABILITY. If this Agreement or any provision hereof
shall be invalidated or held illegal or unenforceable for any reason whatsoever:
(a) 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
(b) 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 by the provision held invalid, illegal or
unenforceable.
Section 13. MISCELLANEOUS.
(a) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and together which shall constitute one and
the same agreement.
(b) Any headings used herein are used solely for convenience and shall
not be deemed to constitute part of this Agreement or to affect the construction
hereof.
(c) All notices, demands, and other communications hereunder must be in
writing and shall be deemed to have been received if delivered by hand or mailed
by certified or registered mail, postage prepaid, or sent by overnight or
express courier, postage prepaid to the following persons and addresses:
If to the Corporation:
XXXXXX PRODUCTS LTD.
000 XxXxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: President
If to the Indemnitee: Xxxxxxx X. Xxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
or to such other name and address as to which notice shall duly be given in
accordance with the terms hereof.
(d) this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
(e) The Indemnitee agrees to promptly notify the Corporation upon being
served with any citation, complaint, indictment or other document that might
reasonably result in indemnification or advancement of expenses hereunder.
However, no failure to provide such notice shall result in the Indemnitee losing
any of his rights hereunder or impose any liability whatsoever on the
Indemnitee.
(f) This Agreement may not be modified or amended except in a writing
signed by both 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 nor shall such waiver constitute a continuing waiver.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
XXXXXX PRODUCTS LTD.
By /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
