FORM OF INDEMNIFICATION AGREEMENT
Exhibit (10)(a)
This
Indemnification Agreement (“Agreement”) is made as of the
_____
day of
,
by
and between The Xxxxxx-Xxxx
Company, an Ohio corporation (the “Company”), and
(the “Indemnitee”), a Director
and an officer of the Company.
RECITALS
A. The
Indemnitee is presently serving as a Director and an officer of the Company and the
Company desires the Indemnitee to continue in those capacities. The Indemnitee is willing, subject
to certain conditions, including, without limitation, the execution and performance of this
Agreement by the Company, to continue in those capacities.
B. In addition to
the indemnification to which the Indemnitee is entitled under the
Regulations of the Company, as amended (the “Regulations”), the Company has obtained, at its sole
expense, insurance protecting the Company and its officers and Directors, including the Indemnitee,
against certain losses arising out of actual or threatened actions, suits or proceedings to which
such persons may be made or threatened to be made parties. However, as a result of circumstances
having no relation to, and beyond the control of, the Company and the Indemnitee, the scope of that
insurance has, from time to time, been reduced, and may be further reduced, and there can be no
assurance of the continuation or renewal of that insurance.
Accordingly, and in order to induce the Indemnitee to continue to serve in his present
capacities, the Company and the Indemnitee agree as follows:
1. CONTINUED SERVICE. The Indemnitee shall continue to serve at the will of the Company as a
Director and an officer of the Company so long as he is duly elected and qualified in accordance
with the Regulations or until he resigns in writing in accordance with applicable law.
2. INITIAL INDEMNITY. (a) The Company shall indemnify the Indemnitee if or when he is a party
or is threatened to be made a party to 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 Company), by reason of the fact that he is or was a Director or an officer of the
Company or is or was serving at the request of the Company as a director, trustee, officer,
employee, member, manager or agent of another corporation, domestic or foreign, nonprofit or for
profit, a limited liability company, or a 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 any and
all costs, charges, expenses (including, without limitation, fees and expenses of attorneys and/or
others; all such costs, charges and expenses being herein jointly referred to as “Expenses”),
judgments, fines and amounts paid in settlement, actually and reasonably incurred by the Indemnitee
in connection therewith including any appeal of or from any judgment or decision, unless it is
proved by clear and convincing evidence in a court of competent jurisdiction that the Indemnitee’s
action or failure to act involved an act or omission undertaken with deliberate intent to cause
injury to the Company or undertaken with reckless disregard for the best interests of the Company.
In addition, with respect to any criminal action or proceeding, indemnification hereunder shall be
made only if the Indemnitee had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of “nolo contendere” or its equivalent, shall not, of itself, create a presumption that the
Indemnitee did not satisfy the foregoing standard of conduct to the extent applicable thereto.
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(b) The Company shall indemnify the Indemnitee if or when he is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or proceeding by or in the
right of
the Company to procure a judgment in its favor, by reason of the fact that the Indemnitee is or was
a Director or an officer of the Company or is or was serving at the request of the Company as a
director, trustee, officer, employee, member, manager or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture,
trust or other enterprise, against any and all Expenses actually and reasonably incurred by the
Indemnitee in connection with the
defense or settlement thereof or any appeal of or from any judgment or decision, unless it is
proved by clear and convincing evidence in a court of competent jurisdiction that the Indemnitee’s
action or failure to act involved an act or omission undertaken with deliberate intent to cause
injury to the Company or undertaken with reckless disregard for the best interests of the Company,
except that no indemnification shall be made in respect of any action or suit in which the only
liability asserted against the Indemnitee is pursuant to Section 1701.95 of the Ohio Revised Code
(the “ORC”).
(c) Any indemnification under Section 2(a) or 2(b) (unless ordered by a court) shall be made
by the Company only as authorized in the specific case upon a determination that indemnification of
the Indemnitee is proper in the circumstances because he has met the applicable standard of conduct
set forth in Section 2(a) or 2(b). Such authorization shall be made (i) by the Directors of the
Company (the “Board”) by a majority vote of a quorum consisting of Directors who were not and are
not parties to or threatened with such action, suit or proceeding, or (ii) if such a quorum of
disinterested Directors is not available or if a majority of such quorum so directs, in a written
opinion by independent legal counsel (designated for such purpose by the Board) which shall not be
an attorney, or a firm having associated with it an attorney, who has been retained by or who has
performed services for the Company, or any person to be indemnified, within the five years
preceding such determination, or (iii) by the shareholders of the Company (the “Shareholders”), or
(iv) by the court in which such action, suit or proceeding was brought.
(d) 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 Section 2(a) or 2(b), or in defense of any claim, issue
or matter therein, he shall be indemnified against Expenses actually and reasonably incurred by him
in connection therewith. Expenses actually and reasonably incurred by the Indemnitee in defending
any such action, suit or proceeding shall be paid by the Company as they are incurred in advance of
the final disposition of such action, suit or proceeding under the procedure set forth in Section
4(b) hereof.
(e) For purposes of this Agreement, references to “other enterprises” shall include employee
benefit plans; references to “fines” shall include any excise taxes assessed on the Indemnitee with
respect to any employee benefit plan; references to “serving at the request of the Company” shall
include any service as a director, officer, employee or agent of the Company which imposes duties
on, or involve services by, the Indemnitee with respect to an employee benefit plan, its
participants or beneficiaries; references to the masculine shall include the feminine; and
references to the singular shall include the plural and vice versa.
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3. ADDITIONAL INDEMNIFICATION. Pursuant to Section 1701.13(E) (6) of the ORC, without
limiting any right which the Indemnitee may have pursuant to Section 2 hereof or any other
provision of this Agreement or the Articles of Incorporation, as amended, of the Company (the
Articles), the Regulations, the ORC, any policy of insurance, or otherwise, but subject to any
limitation on the maximum permissible indemnity which may exist under applicable law at the time of
any request for indemnity hereunder and subject to the following provisions of this Section 3, the
Company shall
indemnify the Indemnitee against any amount which he is or becomes obligated to pay relating to or
arising out of any claim made against him because of any act, failure to act or neglect or breach
of duty, including any actual or alleged error, misstatement or misleading statement, which he
commits, suffers, permits or acquiesces in while acting in his capacity as a Director or an officer
of the Company. The payments which the Company is obligated to make pursuant to this Section 3
shall include, without
limitation, judgments, fines and amounts paid in settlement and any and all Expenses actually and
reasonably incurred by the Indemnitee in connection therewith including any appeal of or from any
judgment or decision; provided, however, that the Company shall not be obligated under this Section
3 to make any payment in connection with any claim against the Indemnitee:
(a) to the extent of any fine or similar governmental imposition which the Company is
prohibited by applicable law from paying which results from a final, nonappealable order; or
(b) to the extent based upon or attributable to the Indemnitee having actually
realized a personal gain or profit to which he was not legally entitled, including, without
limitation, profit from the purchase and sale by the Indemnitee of equity securities of the
Company which are recoverable by the Company pursuant to Section 16(b) of the Securities
Exchange Act of 1934, or profit arising from transactions in publicly traded securities of
the Company which were effected by the Indemnitee in violation of Section 10(b) of the
Securities Exchange Act of 1934, or Rule 10b-5 promulgated thereunder.
A determination as to whether the Indemnitee shall be entitled to indemnification under this
Section 3 shall be made in accordance with Section 4(a) hereof. Expenses incurred by the Indemnitee
in defending any claim to which this Section 3 applies shall be paid by the Company as they are
actually and reasonably incurred in advance of the final disposition of such claim under the
procedure set forth in Section 4(b) hereof.
4. CERTAIN PROCEDURES RELATING TO INDEMNIFICATION. (a) For purposes of pursuing his rights to
indemnification under Section 3 hereof, the Indemnitee shall (i) submit to the Board a sworn
statement of request for indemnification substantially in the form of Exhibit 1 attached hereto and
made a part hereof (the “Indemnification Statement”) averring that he is entitled to
indemnification hereunder; and (ii) present to the Company reasonable evidence of all amounts for
which indemnification is requested. Submission of an Indemnification Statement to the Board shall
create a presumption that the Indemnitee is entitled to indemnification hereunder, and the Company
shall, within sixty (60) calendar days after submission of the Indemnification Statement, make the
payments requested in the Indemnification Statement to or for the benefit of the Indemnitee, unless
(i) within such 60-calendar-day period the Board shall resolve by vote of a majority of the
Directors at a meeting at which a quorum is present that the Indemnitee is not entitled to
indemnification under Section 3 hereof, (ii) such vote shall be based upon clear and convincing
evidence (sufficient to rebut the foregoing presumption) and (iii) the Indemnitee shall have
received within such period notice in writing of such vote, which notice shall disclose with
particularity the evidence upon which the vote is based. The foregoing notice shall be sworn to by
all persons who participated in the vote and voted to deny indemnification. The provisions of this
Section 4(a) are intended to be procedural only and shall not affect the right of the Indemnitee to
indemnification under Section 3 of this Agreement so long as the Indemnitee follows the prescribed
procedure, and any determination by the Board that the Indemnitee is not entitled to
indemnification and any failure to make the payments requested in the Indemnification Statement
shall be subject to judicial review by any court of competent jurisdiction.
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(b) For purposes of obtaining payments of Expenses in advance of final disposition pursuant
to the second sentence of Section 2(d) or the last sentence of Section 3 hereof, the Indemnitee
shall submit to the Company a sworn request for advancement of Expenses substantially in the form
of Exhibit 2 attached hereto and made a part hereof (the “Undertaking”), averring that he has
reasonably incurred actual Expenses in defending an action, suit or proceeding referred to in
Section 2(a) or 2(b) or any claim referred to in Section 3, or pursuant to Section 7 hereof. Unless
at the time of the Indemnitee’s
act or omission at issue, the Articles or Regulations of the Company prohibit such advances by
specific reference to ORC Section 1701.13(E) (5) (a) and unless the only liability asserted against
the Indemnitee in the subject action, suit or proceeding is pursuant to ORC Section 1701.95, the
Indemnitee shall be eligible to execute Part A of the Undertaking by which he undertakes to (a)
repay such amount if it is proved by clear and convincing evidence in a court of competent
jurisdiction that the Indemnitee’s action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to the Company or undertaken with reckless disregard for the
best interests of the Company and (b) reasonably cooperate with the Company concerning the action,
suit, proceeding or claim. In all cases, the Indemnitee shall be eligible to execute Part B of the
Undertaking by which he undertakes to repay such amount if it ultimately is determined that he is
not entitled to be indemnified by the Company under this Agreement or otherwise. In the event that
the Indemnitee is eligible to and does execute both Part A and Part B of the Undertaking, the
Expenses which are paid by the Company pursuant thereto shall be required to be repaid by the
Indemnitee only if he is required to do so under the terms of both Part A and Part B of the
Undertaking. Upon receipt of the Undertaking, the Company shall thereafter promptly pay such
Expenses of the Indemnitee as are noticed to the Company in writing and in reasonable detail
arising out of the matter described in the Undertaking. No security shall be required in connection
with any Undertaking.
5. LIMITATION ON INDEMNITY. Notwithstanding anything contained herein to the contrary, the
Company shall not be required hereby to indemnify the Indemnitee with respect to any action, suit
or proceeding that was initiated by the Indemnitee unless (i) such action, suit or proceeding was
initiated by the Indemnitee to enforce any rights to indemnification arising hereunder and such
person shall have been formally adjudged to be entitled to indemnity by reason hereof, (ii)
authorized by another agreement to which the Company is a party whether heretofore or hereafter
entered or (iii) otherwise ordered by the court in which the suit was brought.
6. SUBROGATION; DUPLICATION OF PAYMENTS. (a) 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 all papers required and shall do everything that may be necessary
to secure such rights, including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
(b) The Company shall not be liable under this Agreement to make any payment in connection
with any claim made against the Indemnitee to the extent the Indemnitee has actually received
payment (under any insurance policy, the Company’s Regulations or otherwise) of the amounts
otherwise payable hereunder.
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7. FEES AND EXPENSES OF ENFORCEMENT. It is the intent of the Company that the Indemnitee not
be required to incur the expenses associated with the enforcement of his rights under this
Agreement by litigation or other legal action because the cost and expense thereof would
substantially detract from the benefits intended to be extended to the Indemnitee hereunder.
Accordingly, if it should appear to the Indemnitee that the Company has failed to comply with any
of its obligations under this Agreement or in the event that the Company or any other person takes
any action to declare this Agreement void or unenforceable, or institutes any action, suit or
proceeding to deny, or to recover from,
the Indemnitee the benefits intended to be provided to the Indemnitee hereunder, the Company
irrevocably authorizes the Indemnitee from time to time to retain counsel of his choice, at the
expense of the Company as hereafter provided, to represent the Indemnitee in connection with the
initiation or defense of any litigation or other legal action, whether by or against the Company or
any director, officer, shareholder or other person affiliated with the Company, in any
jurisdiction. Regardless of the outcome thereof, the Company shall pay and be solely responsible
for any and all costs, charges and expenses, including,
without limitation, fees and expenses of attorneys and others, reasonably incurred by the
Indemnitee pursuant to this Section 7.
8. MERGER OR CONSOLIDATION. In the event that the Company shall be a constituent corporation
in a consolidation, merger or other reorganization, the Company, if it shall not be the surviving,
resulting or acquiring corporation therein, shall require as a condition thereto that the
surviving, resulting or acquiring corporation agree to assume all of the obligations of the Company
hereunder and to indemnify the Indemnitee to the full extent provided herein. Regardless of whether
the Company is the resulting, surviving or acquiring corporation in any such transaction, the
Indemnitee shall also stand in the same position under this Agreement with respect to the
resulting, surviving or acquiring corporation as he would have with respect to the Company if its
separate existence had continued.
9. NONEXCLUSIVITY AND SEVERABILITY. (a) The rights to indemnification provided by this
Agreement shall not be exclusive of any other rights of indemnification to which the Indemnitee may
be entitled under the Articles, the Regulations, the ORC or any other statute, any insurance
policy, agreement or vote of shareholders or directors or otherwise, as to any actions or failures
to act by the Indemnitee, and shall continue after he has ceased to be a director, officer,
employee or agent of the Company or other entity for which his service gives rise to a right
hereunder, and shall inure to the benefit of his heirs, executors and administrators.
(b) If any provision of this Agreement or the application of any provision hereof to any
person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this
Agreement and the application of such provision to other persons or circumstances shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.
10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio, without giving effect to the principles of conflict of laws thereof.
11. MODIFICATION. This Agreement and rights and duties of the Indemnitee and the Company
hereunder may be modified only by an instrument in writing signed by both parties hereto.
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IN WITNESS WHEREOF, THE PARTIES HEREUNTO HAVE DULY EXECUTED THIS AGREEMENT AS OF THE DATE
FIRST ABOVE WRITTEN.
| THE XXXXXX-XXXX COMPANY | ||||||
| BY | |
|||||
| CHIEF EXECUTIVE OFFICER | ||||||
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Exhibit (1)
INDEMNIFICATION STATEMENT
STATE OF
|
) | |||||
| ) | SS: | |||||
COUNTY OF
|
) |
I,
, being first duly sworn, do depose and say as follows:
1. This Indemnification
Statement is submitted pursuant to the Indemnification Agreement,
dated
,
, between The Xxxxxx-Xxxx Company, an Ohio
corporation (the “Company”), and the undersigned.
2. I am requesting
indemnification against costs, charges, expenses (which may include fees
and expenses of attorneys and/or others), judgments, fines and amounts paid in settlement
(collectively, “Liabilities”), which have been actually and reasonably incurred by me in connection
with a claim referred to in Section 3 of the aforesaid Indemnification Agreement.
3. With respect to all matters related to any such claim, I am entitled to be indemnified as
herein contemplated pursuant to the aforesaid Indemnification Agreement.
4. Without limiting
any other rights which I have or may have, I am requesting
indemnification against Liabilities which have or may arise out of
.
| |
Subscribed and sworn to
before me, a Notary Public in and for said County and State, this
day of
, 20
.
|
|
{Seal}
My commission expires
the
day of
, 20 .
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Exhibit (2)
UNDERTAKING
STATE OF
|
) | |||||
| ) | SS: | |||||
COUNTY OF
|
) |
I,
, being first duly sworn, do depose and say as follows:
1. This Undertaking
is submitted pursuant to the Indemnification Agreement, dated
,
, between The Xxxxxx-Xxxx Company, an Ohio corporation (the
“Company”), and the undersigned.
2. I am requesting
payment of costs, charges and expenses which I have reasonably incurred or
will reasonably incur in defending an action, suit or proceeding, referred to in Section 2(a) or
2(b) or any claim referred to in Section 3, or pursuant to Section 7, of the aforesaid
Indemnification Agreement.
3. The costs,
charges and expenses for which payment is requested are, in general, all
expenses related to
.
4. Part A
I hereby undertake to
(a) repay all amounts paid pursuant hereto if it is proved by clear and
convincing evidence in a court of competent jurisdiction that my action or failure to act which is
the subject of the matter described herein involved an act or omission undertaken with deliberate
intent to cause injury to the Company or undertaken with reckless disregard for the best interests
of the Company and (b) reasonably cooperate with the Company concerning the action, suit,
proceeding or claim.
| |
4. Part B
I hereby undertake
to repay all amounts paid pursuant hereto if it ultimately is determined
that I am not entitled to be indemnified by the Company under the aforesaid Indemnification
Agreement or otherwise.
| |
Subscribed and sworn
to before me, a Notary Public in and for said County and State, this
day of
, 20 .
{Seal}
My commission expires the
day of
, 20 .
32
