EXHIBIT 10(a)
LIST OF RECIPIENTS OF INDEMNITY AGREEMENTS
On May 10, 1988, Hastings Manufacturing Company entered into an
Indemnity Agreement in the form attached hereto with each officer and/or
director listed below:
Xxxxxxx X. Xxxxxxx
Xxxx X.X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxx
Xxxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxx
Xxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. XxXxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxx
INDEMNITY AGREEMENT
This Agreement is made as of the 10th day of May, 1988, by and
between HASTINGS MANUFACTURING COMPANY, a Michigan corporation ("Hastings")
and the undersigned officer and/or director of Hastings ("Indemnitee").
WHEREAS, it is essential to Hastings to retain and attract as
directors and officers the most capable persons available; and
WHEREAS, the substantial increase in corporate litigation
subjects directors and officers to expense litigation risks at the same
time that the availability of directors' and officers' liability insurance
has been severely limited; and
WHEREAS, it is now and has always been the express policy of
Xxxxxxxx to indemnify its directors and officers so as to provide them with
the maximum possible protection permitted by law; and
WHEREAS, Xxxxxxxxxx does not regard the protection available
under Xxxxxxxx' Articles of Incorporation and Bylaws as adequate in the
present circumstances, and may not be willing to continue to serve as a
director or officer without adequate protection, and Hastings desires
Indemnitee to serve in such capacity.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement:
(a) "Expenses" shall mean all costs, expenses and
obligations paid or incurred in connection with investigating,
litigating, being a witness in, defending or participating in, or
preparing to litigate, defend, be a witness in or participate in
any matter that is the subject of a Proceeding (as defined
below), including attorneys' and accountants' fees and court
costs.
(b) "Proceeding" shall mean any threatened, pending, or
completed action, suit or proceeding, or any inquiry or
investigation, whether brought by or in the right of Hastings or
otherwise and whether of a civil, criminal, administrative or
investigative nature, in which Indemnitee may be or may have been
involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director, officer, employee, agent or
fiduciary of Xxxxxxxx, or by reason of any action taken by
Indemnitee or any inaction on Indemnitee's part while acting as a
director, officer, employee, agent or fiduciary of Hastings, or
by reason of the fact that Indemnitee is or was serving at the
request of Xxxxxxxx as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture,
trust or other enterprise.
(c) "Resolution Costs" shall include any amount paid in
connection with a Proceeding and in satisfaction of a judgment,
fine, penalty or any amount paid in settlement.
SECTION 2. AGREEMENT TO SERVE. Xxxxxxxxxx agrees to serve as a
director and/or officer of Xxxxxxxx for so long as Indemnitee is duly
elected or appointed or until the tender of Indemnitee's written
resignation.
SECTION 3. INDEMNIFICATION. The indemnification provided under
this Agreement shall be as follows:
(a) Xxxxxxxx shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by Indemnitee in
connection with any Proceeding. Additionally, in any Proceeding
other than a Proceeding by or in the right of Hastings, Xxxxxxxx
shall indemnify Indemnitee against all Resolution Costs actually
and reasonably incurred by Indemnitee in connection with such
Proceeding. No indemnification shall be made under this
subsection:
(i) with respect to remuneration paid to Indemnitee if
it shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law;
(ii) on account of any suit in which judgment is
rendered against Indemnitee for an accounting of profits
made from the purchase or sale by Indemnitee of securities
of Hastings pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934 and amendments thereto,
or similar provisions of any federal, state, or local law;
(iii) on account of Indemnitee's conduct which is
determined by a final judgment or other final adjudication
to have been knowingly fraudulent, deliberately dishonest or
willful misconduct;
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(iv) on account of Xxxxxxxxxx's conduct which by a
final judgment or other final adjudication is determined to
have been in bad faith, in opposition to the best interests
of Hastings or produced an unlawful personal benefit;
(v) with respect to a criminal proceeding if the
Indemnitee knew or reasonably should have known that
Indemnitee's conduct was illegal; or
(vi) if a final decision by a court having
jurisdiction in the matter shall determine that such
indemnification is not lawful.
(b) In addition to any indemnification provided under
Subsection 3(a) above, Hastings shall indemnify Indemnitee
against any Expenses or Resolution Costs incurred by Indemnitee,
regardless of the nature of the Proceeding in which Expenses
and/or Resolution Costs were incurred, if such Expenses or
Resolution Costs would have been covered under the directors' and
officers' liability insurance policies, if any, in effect on the
effective date of this Agreement or any such insurance policies
which become effective on any subsequent date.
(c) In addition to any indemnification provided under
Subsections 3(a) and 3(b) above, Hastings shall provide
Indemnitee, to the fullest extent allowed by law as presently or
hereafter enacted or interpreted, with indemnification against
any Expenses and/or Resolution Costs incurred by Indemnitee in
connection with any Proceeding. To the extent a change in the
Michigan Business Corporation Act (whether by statute or judicial
decision) permits greater indemnification, either by agreement or
otherwise, than presently provided by law or this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by such
change.
(d) Without limiting Indemnitee's right to indemnification
under any other provision of this Agreement, Xxxxxxxx shall
indemnify Indemnitee in accordance with the provisions of this
Subsection if Indemnitee is a party to or threatened to be made a
party to or otherwise involved in any Proceeding by or in the
right of Xxxxxxxx to procure a judgment in its favor by reason of
the fact that Indemnitee was or is a director and/or officer of
Hastings or is or was serving at the request of Xxxxxxxx as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
all Expenses actually and reasonably incurred by Indemnitee and
any amounts paid by Indemnitee in settlement of such Proceeding,
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but only if Indemnitee acted in good faith in a manner which
Indemnitee reasonably believed to be in or not opposed to the
best interests of Xxxxxxxx, except that no indemnification shall
be made under this Subsection in respect of any claim, issue or
matter as to which Indemnitee shall have been adjudged to be
liable to Hastings in the performance of his duty to Hastings,
unless and only to the extent that any court in which such
Proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, Xxxxxxxxxx is fairly and reasonably
entitled to indemnity for such amounts as such court shall deem
proper.
(e) Notwithstanding anything in this Agreement to the
contrary, prior to a Change in Control (as hereinafter defined),
Indemnitee shall not be entitled to indemnification pursuant to
this Agreement in connection with any Proceeding initiated by
Indemnitee against Xxxxxxxx or any director, officer, employee,
agent or fiduciary of Hastings (in such capacity) unless Xxxxxxxx
has joined in or consented to the initiation of such Proceeding.
SECTION 4. PAYMENT OF INDEMNIFICATION.
(a) Expenses incurred by the Indemnitee and subject to
indemnification under Section 3 above shall be paid directly by
Xxxxxxxx or reimbursed to the Indemnitee within two (2) days
after the receipt of a written request of the Indemnitee
providing that Indemnitee undertakes to repay any amount paid or
advanced under this Section to the extent that it is ultimately
determined that Indemnitee is not entitled to such
indemnification.
(b) Except as otherwise provided in Section 4(a) above, any
indemnification under Section 3 above shall be made no later than
thirty (30) days after receipt by Xxxxxxxx of the written request
of Indemnitee, unless within said thirty (30) day period the
Board of Directors, by a majority vote of a quorum consisting of
directors who are not parties to such Proceeding, determines that
the Indemnitee is not entitled to the indemnification set forth
in Section 3 or unless the Board of Directors refers the
Indemnitee's indemnification request to independent legal
counsel. In cases where there are no directors who are not
parties to the Proceeding, the indemnification request is
referred to independent legal counsel. If the indemnification
request is referred to independent legal counsel, then Indemnitee
shall be paid no later than forty-five (45) days after
Indemnitee's initial request to Hastings unless within that time
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independent legal counsel presents to the Board of Directors a
written opinion stating in unconditional terms that
indemnification is not allowed under Section 3 of this Agreement.
If a Change in Control (as defined in Section 5) occurs and
results in individuals who were directors prior to the
circumstances giving rise to the Change in Control ceasing for
any reason to constitute a majority of the Board of Directors,
the above determination, if any, shall be made by independent
legal counsel and not the Board of Directors. Xxxxxxxx agrees to
pay the reasonable fees of the independent legal and to fully
indemnify 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.
If there has not been a Change in Control as defined in Section
5, independent legal counsel shall be selected by the Board or
Directors or the executive committee of the board, and if there
has been a Change in Control, the independent legal counsel shall
be selected by Indemnitee.
(c) The right to indemnification payments as provided by
this Agreement shall be enforceable by Indemnitee in any court of
competent jurisdiction. The burden of proving that
indemnification is not permitted by this Agreement shall be on
Hastings or on the person challenging the indemnification.
Neither the failure of Hastings, including its Board of
Directors, to have made a determination prior to the commencement
of any Proceeding that indemnification is proper, nor an actual
determination by Xxxxxxxx, including its Board of Directors or
independent legal counsel, that indemnification is not proper,
shall bar an action by Indemnitee to enforce this Agreement or
create a presumption that Indemnitee is not entitled to
indemnification under this Agreement. If the Board of Directors
or independent legal counsel determines in accordance with
Section 4(b) above that Indemnitee would not be permitted to be
indemnified in whole or in part, Indemnitee shall have the right
to commence litigation in any court in the State of Michigan
having subject matter jurisdiction thereof and in which venue is
proper seeking an independent determination by the court or
challenging any such determination by the Board of Directors or
independent legal counsel, and Xxxxxxxx hereby consents to
service of process and to appear in any such proceeding.
Expenses incurred by Indemnitee in connection with successfully
establishing Indemnitee's right to indemnification, in whole or
in part, shall also be reimbursed by Xxxxxxxx.
SECTION 5. ESTABLISHMENT OF TRUST. In the event of a Potential
Change in Control of Hastings, as hereafter defined, Hastings shall, upon
written request by Xxxxxxxxxx, create a trust for the benefit of the
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Indemnitee and from time to time upon written request of Indemnitee shall
fund such trust in an amount sufficient to satisfy any and all Expenses or
Resolution Costs that may properly be subject to indemnification under
Section 3 above anticipated at the time of each such request. The amount
or amounts to be deposited in the trust pursuant to this funding obligation
shall be determined by a majority vote of a quorum consisting of directors
who are not parties to such Proceeding, the executive committee of the
Board of Directors or the President of Hastings. If all such individuals
are parties to the Proceeding, the amount or amounts to be deposited in the
trust shall be determined by independent counsel. The terms of the trust
shall provide that upon a Change in Control: (i) the trust shall not be
revoked or the principal thereof invaded, without the written consent of
the Indemnitee; (ii) the trustee shall advance, within two (2) business
days of a request by the Indemnitee, any amount properly payable to
Indemnitee under Subsection 4(a) of this Agreement; (iii) the trust shall
continue to be funded by the Corporation in accordance with the funding
obligation set forth above; (iv) the trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise; and (v) all
unexpended funds in such trust shall revert to Hastings upon a final
determination by a court of competent jurisdiction that the Indemnitee has
been fully indemnified under the terms of this Agreement. The trustee
shall be chosen by the Indemnitee and shall be a national or state bank
having a combined capital and surplus of not less than $50,000,000.
Nothing in this Section shall relieve Xxxxxxxx of any of its obligations
under this Agreement. At the time of each draw from the trust fund, the
Indemnitee shall provide the trustee with a written request providing that
Indemnitee undertakes to repay such amount to the extent that it is
ultimately determined that Indemnitee is not entitled to such
indemnification. Any funds, including interest or investment earnings
thereon, remaining in the trust fund shall revert and be paid to Hastings
if: (i) a Change in Control has not occurred; and (ii) if the executive
committee of the Board of Directors or the Chairman or Chief Executive
Officer of Xxxxxxxx determines that the circumstances giving rise to that
particulate funding of the trust no longer exists.
For purposes of this Section and Section 7 hereof, a "Change in
Control" shall mean a change in control of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14a
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), provided that, without limitation, such a change in
control shall be deemed to have occurred if: (i) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of Hastings and any new director whose
election by the Board of Directors or nomination for election by Xxxxxxxx'
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
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so approved, cease for any reason to constitute a majority thereof; (ii)
the shareholders of Hastings approve a merger or consolidation of Hastings
with any other corporation, other than a merger or consolidation which
would result in the voting securities of Hastings outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at least
80% of the total voting power represented by the voting securities of
Hastings or such surviving entity outstanding immediately after such merger
or consolidation; or (iii) the shareholders of Xxxxxxxx approve a plan of
complete liquidation of Hastings or an agreement for the sale or
disposition by Hastings of all or substantially all of Hastings' assets.
For purposes of this Section, a "Potential Change in Control"
shall be deemed to have occurred if (i) Hastings enters into an agreement,
the consummation of which would result in the occurrence of a Change in
Control; (ii) any person (including Xxxxxxxx) publicly announces an
intention to take or to consider taking actions which once consummated
would constitute a Change in Control; or (iii) the Board of Directors
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
SECTION 6. PARTIAL INDEMNIFICATION; SUCCESSFUL DEFENSE. If
Indemnitee in entitled under any provision of this Agreement to
indemnification by Xxxxxxxx for some or a portion of the Expenses or
Resolution Costs actually and reasonably incurred by Indemnitee but not,
however, for the total amount thereof, Xxxxxxxx shall nevertheless
indemnify Indemnitee for the portion of such Expenses or Resolution Costs
to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all claims
relating in whole or in part to a Proceeding or in defense of any issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection therewith.
SECTION 7. CONSENT. Unless and until a Change in Control has
occurred, Xxxxxxxx shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding made without
Xxxxxxxx' written consent. Xxxxxxxx shall not settle any Proceeding in any
manner which would impose any penalty or limitation on Indemnitee without
Indemniteels written consent. Neither Hastings nor the Indemnitee will
unreasonably withhold their consent to any proposed settlement.
SECTION 8. SEVERABILITY. If this Agreement or any portion hereof
(including any provision within a single section, subsection or sentence)
shall be held to be invalid, void or otherwise unenforceable on any ground
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by any court of competent jurisdiction, Xxxxxxxx shall nevertheless
indemnify Indemnitee as to any Expenses or Resolution Costs with respect to
any Proceeding to the full extent permitted by law or any applicable
portion of this Agreement that shall not have been invalidated, declared
void or otherwise held to be unenforceable.
SECTION 9. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The
indemnification provided by this Agreement shall be in addition to any
other rights to which Indemnitee may be entitled under the Articles of
Incorporation, the Bylaws, any agreement, any vote of shareholders or
disinterested directors, the Michigan Business Corporation Act, or
otherwise, both as to actions in Indemnitee's official capacity and as to
actions in another capacity while holding such office.
SECTION 10. NO PRESUMPTION. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon
a plea of nolo contendere, or its equivalent, shall not create a
presumption that Indemnitee did not meet any particular standard of conduct
or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
SECTION 11. SUBROGATION. In the event of payment under this
Agreement, Xxxxxxxx shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who shall execute all
documents required and shall do everything that may be necessary to secure
such rights, including the execution of such documents necessary to enable
Xxxxxxxx to effectively bring suit to enforce such rights.
SECTION 12. NO DUPLICATION OF PAYMENTS. Xxxxxxxx shall not be
liable under this Agreement to make any payment to the extent Indemnitee
has otherwise actually received payment (under any insurance policy, Bylaw
or otherwise) of the amounts otherwise indemnifiable hereunder.
SECTION 13. NOTICE. Indemnitee shall, as a condition precedent to
his right to be indemnified under this Agreement, give to Xxxxxxxx notice
in writing as soon as practicable of any claim for which indemnity will or
could be sought under this Agreement. Notice to Hastings shall be directed
to Hastings Manufacturing Company, 000 Xxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx
00000, Attention: Secretary (or to such other individual or address as
Hastings shall designate in writing to Indemnitee). Notice shall be deemed
received three (3) days after the date postmarked if sent by prepaid mail
properly addressed. In addition, Indemnitee shall give Hastings such
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information and cooperation as it may reasonably require and shall be
within Indemnitee's power to give.
SECTION 14. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall constitute the original.
SECTION 15. CONTINUATION OF INDEMNIFICATION. The indemnification
rights provided to Indemnitee under this Agreement, including the right
provided under Subsection 4(a) above, shall continue after Indemnitee has
ceased to be a director, officer, employee, agent or fiduciary of Hastings
or any other corporation, partnership, joint venture, trust or other
enterprise in which Indemnitee served in any such capacity at the request
of Hastings.
SECTION 16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, and their respective
successors and assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all
of-the business or assets of Hastings, spouse, heirs, and personal and
legal representatives.
SECTION 17. APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Michigan
applicable to contracts made and to be performed in such state without
giving effects to the principles of conflicts of laws.
SECTION 18. LIABILITY INSURANCE. To the extent Hastings maintains
an insurance policy or policies providing directors' and officers'
liability insurance, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of
the coverage available for any director, officer, employee, agent or
fiduciary of Xxxxxxxx.
SECTION 19. PERIOD OF LIMITATIONS. No legal action shall be
brought and no cause of action shall be asserted by or on behalf of
Hastings or any affiliate of Hastings against Indemnitee, Indemnitee's
spouse, heirs, executors or personal or legal representatives after the
expiration of two (2) years from the date of accrual of such cause of
action, and any claim or cause of action of Hastings or its affiliate shall
be extinguished and deemed released unless asserted by the timely filing of
a legal action within such two (2) year period; provided, however, that if
any shorter period of limitations is otherwise applicable to any such cause
of action such shorter period shall govern.
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SECTION 20. AMENDMENTS; WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by
both of the 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 (whether or not similar) nor shall such waiver constitute
a continuing waiver.
ATTEST: HASTINGS MANUFACTURING COMPANY
______________________________ By __________________________________________
Xxxxx X. Xxxxxxx Xxxx X. X. Xxxxxxx
Secretary Executive Vice President - Marketing
INDEMNITEE
_____________________________________________
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