1
Exhibit (10)(c)
Exhibit (10)(c)* to Report
on Form 10-K for Fiscal
Year Ended June 30, 2000
by Xxxxxx-Xxxxxxxx Corporation
Form of Indemnification Agreement entered into by the Registrant and
its directors and executive officers.
*Numbered in accordance with Item 601 of Regulation S-K.
2
1
INDEMNIFICATION AGREEMENT
-------------------------
This Indemnification Agreement ("Agreement") is made as of the ____ day of
______, 200__, by and between Xxxxxx-Xxxxxxxx Corporation, an Ohio corporation
(the "Company"), and _________________ (the "Indemnitee"), a Director of the
Company.
RECITALS
--------
A. The Indemnitee is presently serving as a Director of the Company and
the Company desires the Indemnitee to continue in that capacity. The Indemnitee
is willing, subject to certain conditions including without limitation the
execution and performance of this Agreement by the Company, to continue in that
capacity.
B. In addition to the indemnification to which the Indemnitee is entitled
under the Regulations of the Company (the "Regulations"), the Company has
obtained, as 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 been 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 capacity, 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 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 of the Company 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
3
2
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.
(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 of the Company 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 Indemnitee is pursuant to Section 1701.95 of the Ohio
Revised Code.
(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 involves services by, the Indemnitee with respect to an employee
4
3
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.
3. ADDITIONAL INDEMNIFICATION. Pursuant to Section 1701.13(E)(6) of the
Ohio Revised Code (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, 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 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 60 calendar days after submission of the Indemnification Statement, make
5
4
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 Indemnitee to
indemnification under Section 3 of this Agreement so long as Indemnitee follows
the prescribed procedure and any determination by the Board that 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.
(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 8 hereof. Unless at the time of the Indemnitee's act or
omission at issue, the Articles of Incorporation 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
6
5
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 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 Indemnitee to the extent
Indemnitee has actually received payment (under any insurance policy, the
Company's Regulations or otherwise) of the amounts otherwise payable hereunder.
7. RATIFICATION. The Company may, at its option, propose at any future
meeting of Shareholders that this Agreement be ratified by the Shareholders; if
the Shareholders vote not to ratify this Agreement, the Company shall have the
right to amend this Agreement without the consent of the Indemnitee; provided,
however, that no such amendment or termination shall deny or diminish the
Indemnitee's rights to indemnity pursuant hereto (or the procedures set forth
herein to obtain indemnification) as applied to any act or failure to act
occurring in whole or in part prior to the date of such amendment or termination
(whether or not a claim hereunder is made before or after such date).
8. 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 8.
9. MERGER OF 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.
Whether or
7
6
not 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.
10. 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 failure 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. In the event of any payment under this Agreement,
the Company shall be subrogated to the extent thereof to all rights of recovery
previously 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 right.
(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.
11. 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.
12. MODIFICATION. This Agreement and the rights and duties of the
Indemnitee and the Company hereunder may be modified only by an instrument in
writing signed by both parties hereto.
8
7
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
XXXXXX-XXXXXXXX CORPORATION
By:
-----------------------------------
[Title]
--------------------------------------
[Signature of Indemnitee]
9
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 _____________, 200__, between Xxxxxx-Xxxxxxxx
Corporation (the "Company"), an Ohio corporation, 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
-------------------------------------------------------------------------------
---------------------------------------------------.
------------------------------
[Signature of Indemnitee]
Subscribed and sworn to before me, a Notary Public in and for said County
and State, this ______ day of _____________ 200__.
------------------------------
[Seal]
My commission expires the _____ day of __________, 200__.
10
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 _____________, 200__, between Xxxxxx-Xxxxxxxx Corporation (the
"Company"), an Ohio corporation 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 8, 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.
------------------------------
[Signature of Indemnitee]
11
2
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.
------------------------------
[Signature of Indemnitee]
Subscribed and sworn to before me, a Notary Public in and for said County
and State, this ______ day of _____________ 200__.
------------------------------
[Seal]
My commission expires the _____ day of __________, 200__.
