EXHIBIT 10.8
INDEMNIFICATION AGREEMENT
This Agreement made as of this 30th day of March, 2004 between Corrpro
Companies, Inc., an Ohio corporation (the "Company"), and a director, officer or
Representative (as hereinafter defined) of the Company ("Indemnitee");
WHEREAS, the Company and Indemnitee are each aware of the exposure to litigation
of officers, directors and representatives of the Company as such persons
exercise their duties to the Company;
WHEREAS, the Company and Indemnitee are also aware of conditions in the
insurance industry that have affected and may continue to affect the Company's
ability to obtain appropriate director's and officers' liability insurance on an
economically acceptable basis;
WHEREAS, the Company desire to continue to benefit from the services of highly
qualified, experience and otherwise competent persons such as the Indemnitee;
WHEREAS, the Company desires to provide and Indemnitee desires to obtain the
broadest indemnification protection available under Ohio law to its directors,
officers or other representative;
WHEREAS, Indemnitee desires to serve or to continue to serve the Company as a
director, officer or as a direct, officer, employee, agent, trustee or other
fiduciary of another corporation, partnership, joint venture, trust or other
enterprise at the request of the Company, for so long as the Company continues
to provide on an acceptable basis adequate and reliable indemnification against
certain liabilities and expenses which may be incurred by Indemnitee.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1 - INDEMNIFICATION
(a) Indemnification. The Company shall indemnify Indemnitee with respect to
his activities as a director or officer of the Company and/or as a person
who is serving or has served on behalf of the Company ("Representative")
as a director, officer, employee, agent, trustee or other fiduciary of
another corporation, partnership, joint venture, trust or other
enterprise, domestic or foreign, at the request of the Company (an
"Affiliated Entity") against Expenses (as defined below) actually and
reasonably incurred by him in connection with any claim against
Indemnitee, the Company or any other party which is the subject of any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, investigative or otherwise and whether
formal or informal (a "Proceeding"), to which Indemnitee was, is or is
threatened to be made a party to or witness or other participant in by
reason of Indemnitee's being or having been such a director, officer or
Representative, to the extent of the
highest and most advantageous to Indemnitee, as determined by Indemnitee,
through one or any combination of the following:
(i) The benefits provided by the Company's Code of Regulations in effect
on the date hereof;
(ii) The benefits provided by the Company's Articles of Incorporation or
Code of Regulations or their equivalent in effect at the time
Expenses are incurred by Indemnitee;
(iii) The benefits allowable under Ohio law in effect on the date hereof;
(iv) The benefits allowable under the law of the jurisdiction under which
the Company exists at the time Expenses are incurred by Indemnitee;
(v) The benefits available under liability insurance obtained by the
Company; and
(vi) Such other benefits as are or may be otherwise available to
Indemnitee.
Any combination of two or more of the benefits provided by (i) through
(vi) above shall be available to the extent that the Applicable Document
(as hereinafter defined) does not require that the benefits provided
therein be exclusive of other benefits. The document or law providing for
the benefits listed in items (i) through (vi) above is called the
"Applicable Document" in this Agreement. The Company hereby undertakes to
use its best efforts to assist Indemnitee, in all proper and legal ways,
to obtain the benefits selected by Indemnitee under items (i) through (vi)
above.
For purposes of this Agreement, the term "Expenses" shall mean all (i)
judgments, damages, liabilities, losses, penalties, excise taxes, fines
and amounts paid in settlement of any nature and (ii) fees, costs and
expenses (including, without limitation, attorneys' fees, disbursements
and retainers), fees and disbursements of expert witnesses, private
investigators and professional advisors (including, without limitation,
accountants and investment bankers), court costs, transcript costs, fees
of experts, travel expenses, duplicating, printing and binding costs,
telephone and fax transmission charges, postage, delivery services,
secretarial services and other disbursements and expenses.
(b) Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of
the Expenses arising from or relating to a Proceeding but not, however,
for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled.
(c) Miscellaneous Terms. For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans for employees of the
Company or of any affiliated entity without regard to ownership of such
plans; references to "fines" shall include any excise taxes assessed on
the Indemnitee with respect to any employee benefit plan; references to
"serving on behalf of the Company" shall include any service as a
director, officer, employee or agent of the Company which imposes duties
on, or involves services by, Indemnitee with respect to an employee
benefit plan, its participants or beneficiaries; references to masculine
shall include the feminine; and references to the singular shall include
the plural and vice versa.
(d) Standard of Conduct. In determining whether a director, officer or
Representative exercised the requisite standard of conduct in order to
qualify for indemnification under any of the foregoing provisions, that
standard shall be deemed to have been met (i) unless it is proven by clear
and convincing evidence in a court of competent jurisdiction that his
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 interest of the Company and all rights of
appeal have been exhausted or lapsed; or (ii) unless in any Proceeding by
or in the right of the Company to which a Indemnitee is a party by reason
of being a director, officer or Representative of the Company, Indemnitee
is adjudged in a court of competent jurisdiction to be liable for
negligence or misconduct in the performance of his duty to the Company and
the court in which such Proceeding is pending determines upon application
that Indemnitee in view of all of the circumstances of the case is not
fairly and reasonably entitled to be indemnified for some or all of the
Expenses incurred in connection with the Proceeding, and all rights of
appeal have been exhausted or lapsed.
SECTION 2 - INSURANCE. The Company shall maintain a directors' and officers'
liability insurance policy or policies meeting at least the coverage standard
established under the policy attached to this Agreement as Exhibit A for so long
as Indemnitee's services are covered hereunder, provided and to the extent that
such insurance is available on a basis acceptable to the Company. Indemnitee
shall be included as a named insured under such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any director, officer or representative of the Company. In the
event that such insurance is unavailable in the amount of the present policy
limits or in the present scope of coverage at premium costs and on other terms
acceptable to the Company, then the Company may forego maintenance of such
insurance coverage; provided, however, the Company agrees that the provisions
hereof shall remain in effect regardless of whether liability or other insurance
is maintained by the Company. Any payments made to Indemnitee under an insurance
policy maintained by the Company shall reduce the obligation of the Company to
make payments under this Agreement by the amount of the payments made under any
such insurance policy. The right of Indemnitee hereunder shall be in addition to
any other rights Indemnitee may now or hereafter have under policies of
insurance maintained by the Company or otherwise.
SECTION 3 - PAYMENT OF EXPENSES. At Indemnitee's request, after receipt of
written notice pursuant to Section 5 hereof and a written undertaking to repay
such amounts so paid on Indemnitee's behalf if it shall ultimately be determined
under the Applicable Document that Indemnitee is not entitled to be indemnified
by the Company for such Expenses, the Company shall pay the Expenses as and when
incurred by Indemnitee. The portion of Expenses which represents attorneys' fees
and other costs incurred in defending any Proceeding shall be paid by the
Company within thirty (30) days of its receipt of such request, together with
reasonable documentation evidencing the amount and nature of such Expenses,
subject to its also having received such a notice and undertaking.
SECTION 4 - ADDITIONAL RIGHTS. The indemnification provided in this Agreement
shall not be exclusive of any other indemnification or right to which Indemnitee
may be entitled and shall continue after Indemnitee has ceased to occupy a
position as a director, officer or Representative of the Company with respect to
Proceedings relating to or arising out of Indemnitee's acts or omissions during
his service in such position.
SECTION 5 - NOTICE TO COMPANY. Indemnitee shall provide to the Company prompt
written notice of any Proceeding brought, threatened, asserted or commenced
against Indemnitee, the Company or any other party with respect to which
Indemnitee may assert a right to indemnification hereunder; provided that
failure to provide such notice shall not in any way limit Indemnitee's rights
under this Agreement.
SECTION 6 - COOPERATION IN DEFENSE AND SETTLEMENT. Indemnitee shall not make any
admission or effect any settlement without the Company's written consent unless
Indemnitee shall have determined to undertake his own defense in such matter and
has waived the benefits of this Agreement. The Company shall not settle any
Proceeding to which Indemnitee is a party in any manner which would impose any
expense on Indemnitee without his written consent. Neither Indemnitee nor the
Company will unreasonably withhold consent to any proposed settlement.
Indemnitee and the Company shall cooperate to the extent reasonably possible
with each other and with the Company's insurers, in attempts to defend and/or
settle any Proceeding.
SECTION 7 - ASSUMPTION OF DEFENSE. Except as otherwise provided below, to the
extent that it may desire, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume Indemnitee's defense in any
Proceeding, with counsel mutually satisfactory to Indemnitee and the Company.
After notice from the Company to Indemnitee of the Company's election to assume
such defense, the Company will not be liable to Indemnitee under this Agreement
for Expenses subsequently incurred by Indemnitee in connection with the defense
other than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ his counsel in such Proceeding, but
the fees and expenses of such counsel incurred after notice from the Company of
its assumption of the defense thereof shall be at Indemnitee's expense unless:
(a) The employment of counsel by Indemnitee has been authorized by the
Company;
(b) Counsel employed by the Company is initially unacceptable or later becomes
unacceptable to Indemnitee and such unacceptability is reasonable under
the then existing circumstances;
(c) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between Indemnitee and the Company in the conduct of the defense
of such Proceeding; or
(d) The Company shall not have employed counsel promptly to assume the defense
of such Proceeding;
in each of which cases the fees and expenses of counsel shall be at the expense
of the Company and subject to payment pursuant to this Agreement provided that
Indemnitee is otherwise entitled to such indemnification under this Agreement.
The Company shall not be entitled to assume the defense of Indemnitee in any
Proceeding brought by or on behalf of the Company or as to which Indemnitee
shall have made either of the conclusions provided for in clauses (b) or (c)
above.
SECTION 8 - REVIEWING PARTY DETERMINATIONS AND ENFORCEMENT.
(a) General Rules. The Company shall not seek to deny indemnification under
this Agreement unless the Reviewing Party (as defined in Section 8(b)
below) shall have determined (in a written opinion, in any case in which
the special independent counsel referred to in Section 8(d) below is
involved) that Indemnitee would not be permitted to be indemnified under
this Agreement, provided, however, that if legal proceedings have
commenced in a court of competent jurisdiction to secure a determination
of whether Indemnitee should be indemnified under this Agreement, any
determination made by the Reviewing Party that Indemnitee would not be
permitted to be identified under this Agreement shall not be binding.
(b) Selection of Reviewing Party. If there has not been a Change in Control
(as defined in Section 8(e) below), the Reviewing Party shall be selected
by the Board of Directors. If there has been such a Change in Control, the
Reviewing Party shall be the special independent counsel referred to in
Section 8(d) below. The Reviewing Party shall be a person or body
consisting of a member or members of the Company's Board of Directors or
any other person or body, including the special independent counsel
referred to in Section 8(d) below, who is not a party to the particular
Proceeding for which Indemnitee is securing indemnification.
(c) Judicial Review. Any determination by the Reviewing Party in favor of the
Indemnitee shall be conclusive and binding on the Company and Indemnitee.
If the Reviewing Party determines that Indemnitee substantively would not
be permitted to be indemnified in whole or in part under this Agreement,
the Company shall have the right to commence litigation in any court in
the State of
Ohio having subject matter jurisdiction thereof and in which venue is
proper seeking a determination by the court that Indemnitee is not
entitled to be indemnified under this Agreement, and Indemnitee hereby
consents to service of process and to appear in any such proceeding. The
prevailing party shall be entitled to prompt reimbursement of any costs
and expenses (including, without limitation, reasonable attorneys' fees)
incurred in connection with such legal action; provided, however, that
Indemnitee shall not be obligated to reimburse the Company unless the
standard set forth in Ohio Revised Code Section 1701.13(E)(5)(a)(i) as
presently in effect is met. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part
under applicable law and the Company does not commence litigation to seek
a determination that Indemnitee is not entitled to be indemnified under
this Agreement, Indemnitee shall have the right to commence litigation in
any court in the State of Ohio having subject matter jurisdiction under
this Agreement, and the Company hereby consents to service of process and
to appear in any such proceeding.
(d) Independent Counsel. The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control) then with respect
to all matters thereafter arising concerning the rights of Indemnitee to
indemnity payments and advances for Expenses under this Agreement or under
any Applicable Document now or hereafter in effect relating to any
Proceeding to which Indemnitee is a party, the Company shall seek legal
advice only from special independent counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably
withheld), and who has not otherwise performed services for Indemnitee or
the Company within the last ten (10) years (other than in connection with
such matters). The Company agrees to pay the reasonable fees of the
special independent counsel referred to above and to indemnify fully such
counsel against any and all expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant thereto.
(e) Change in Control Defined. For purposes of this Agreement, a "Change in
Control" of the Company shall have occurred if at any time during the term
any of the following events shall occur:
(i) The Company is merged or consolidated with another corporation and
immediately thereafter less than eighty percent (80%) of the
outstanding voting securities of the surviving or resulting
corporation are voting securities of the Company outstanding
immediately prior to such merger or consolidation, or are voting
securities issued in exchange for such voting securities of the
Company as a result of the merger or consolidation;
(ii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor scheduled, form or report) each as promulgated pursuant to
the Securities and Exchange Act of 1934, as amended ("Exchange Act")
disclosing the acquisition of twenty percent (20%) or more of the
voting stock of the Company in a transaction or series of
transactions by any person (as the term "person" is used in Section
13(d)(3) or Section 14(d)(2) of the Exchange Act);
(iii) The Company files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Exchange Act disclosing in
response to Item 1 of Form 8-K thereunder or Item 6(a) of Schedule
14A thereunder (or any similar items of successor schedules, form or
reports) that a Change in Control of the Company has or may have
occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
(iv) During any period of twenty-four (24) consecutive months,
individuals who at the beginning of any such period constitute the
directors of the Company cease for any reason to constitute at least
a majority thereof unless the election, or the nomination for
election by the Company's shareholders, of each new director of the
Company was approved by a vote of at least two-thirds (2/3) of the
directors of the Company then still in office who were directors of
the Company at the beginning of any such period.
For purposes of this Section 8, "voting securities" means securities entitled to
vote in an election of directors of the Company, and a "percentage" of voting
securities means the corresponding percentage of such voting power represented
by the voting securities.
SECTION 9 - EXCLUSIONS. Notwithstanding the scope of indemnification which may
be available to Indemnitee from time to time under any Applicable Document, no
indemnification, reimbursement or payment shall be required of the Company
hereunder with respect to: (a) any claim or part thereof as to which
indemnification is prohibited under Ohio or federal law; or (b) any claim or any
part thereof arising under Section 16(b) of the Exchange Act pursuant to which
it shall be ultimately determined that Indemnitee is obligated to pay any
disgorgement of profits or any penalty, fine, settlement or judgment. Nothing in
this Section 9 shall eliminate or diminish Company's obligations to advance that
portion of Indemnitee's Expenses which represent attorneys' fees and other costs
incurred in defending any Proceeding pursuant to Section 3 of this Agreement.
SECTION 10 - EXTRAORDINARY TRANSACTIONS. The Company covenants and agrees that,
in the event of any merger, consolidation or reorganization in which the Company
is not the surviving entity, any sale of all or substantially all of the assets
of the Company or any liquidation of the Company (each such event is hereinafter
referred to as an "extraordinary transaction"), the Company shall: (a) have the
obligations of the Company under this Agreement
expressly assumed by the survivor, purchaser or successor, as the case may be,
in such extraordinary transaction; or (b) otherwise adequately provide for the
satisfaction of the Company's obligations under this Agreement, in a manner
acceptable to Indemnitee.
SECTION 11 - NO PERSONAL LIABILITY. Indemnitee agrees that neither any directors
nor any officer, employee, representative or agent of the Company shall be
personally liable for the satisfaction of the Company's obligations under this
Agreement, and Indemnitee shall look solely to the assets of the Company for
satisfaction of any claims hereunder.
SECTION 12 - SEVERABILITY. If any provision, phrase or other portion of this
Agreement should be determined by any court of competent jurisdiction to be
invalid, illegal or unenforceable, in whole or in part, and such determination
should become final, such provision, phrase or other portion shall be deemed to
be severed or limited, but only to the extent required to render the remaining
provisions and portion of this Agreement enforceable, and this Agreement as thus
amended shall be enforced to give effect to the intention of the parties insofar
as that is possible.
SECTION 13 - SUBROGATION. In the event of any payment under this Agreement, the
Company shall be subrogated to the extent thereof to all rights to
indemnification or reimbursement against any insurer or other entity or person
vested in the Indemnitee, who shall execute all instruments and take all other
actions as shall be reasonably necessary for the Company to enforce such rights.
SECTION 14 - GOVERNING LAW. The parties hereto agrees that this Agreement shall
be construed and enforced in accordance with and governed by the laws of the
State of Ohio.
SECTION 15 - NOTICE. All notices, requests, demands and other communications
hereunder shall be in writing and shall be considered to have been duly given if
delivered by hand and receipted for by the party to whom the notice, request,
demand or other communication shall have been directed, or mailed by certified
mail, return receipt requested, with postage prepaid:
(a) If to the Company, to: Corrpro Companies, Inc.
Attn: Chief Executive Officer
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
(b) If to the Indemnitee, to: []
Xxxxxxx Management Limited III, LLC
000 Xxxxx Xx. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
or such other or further address as shall be designated from time to time by the
Indemnitee or the Company to the other.
SECTION 16 - TERMINATION. This Agreement may be terminated by either party upon
not less than sixty (60) days prior written notice delivered to the other party,
but this Agreement
shall continue in effect notwithstanding such termination with respect to
Indemnitee's activities prior to the effective date of termination.
SECTION 17 - BINDING EFFECT. This Agreement is and shall be binding upon and
shall inure to the benefit of the parties thereto and their respective heirs,
executors, administrators, successors and assigns. This Agreement and the rights
and duties of Indemnitee and the Company hereunder may not be amended or
modified except by written instrument signed and delivered by the parties
hereto.
IN WITNESS HEREOF, the undersigned have executed this Agreement in
duplicate as of the date first above written.
Corrpro Companies, Inc.
By: /s/ Xxxxxx X. Xxx
____________________________
Name: Xxxxxx X. Xxx
_______________________
Title: President
________________________
Indemnitee
By: _____________________________
Director
SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT
Schedule to Exhibit 10.8. The form of indemnification agreement attached to
this Annual Report on Form 10-K has been executed by the Company and Xxxxx X.
Xxxxxxx, Xxx X. Xxxxxxxxx, and Xxxxx X. Xxxx.
