EXHIBIT 10.4
DIRECTOR INDEMNIFICATION AGREEMENT
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THIS DIRECTOR INDEMNIFICATION AGREEMENT (the "Agreement") is made as of
this 1st day of January, 2000, and is by and between Evergood Products
Corporation, a corporation duly organized under the laws of the State of
Delaware with its principal offices located at 000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxx
Xxxx 00000 (hereinafter referred to as the "Company") and ____________
(hereinafter referred to as the "Director").
RECITALS:
WHEREAS, Company is a corporation that was duly formed and is currently
subsisting under the laws of the State of Delaware;
WHEREAS, the Company appointed Director to serve on the Board
of Directors of the Company;
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WHEREAS, Director accepts the appointment and agrees to assume the
duties and responsibilities of a director of the Company as set forth in this
Agreement and in the Company's By-Laws; and
WHEREAS, the parties hereto are desirous of memorializing their
understanding and providing for their respective rights and responsibilities
relating to the indemnification of Director by Company,
NOW, THEREFORE, for good and valuable consideration each to the other
in hand paid, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION ONE
Services by Director
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1. Director hereby agrees to serve as a Director of the Company so long
as he is duly appointed or elected and qualified in accordance with the
applicable provisions of the Certificate of Incorporation and By-Laws of the
Company or any subsidiary of the Company and until such time as he resigns, is
terminated or fails to stand for election. Director may at any time and for
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any reason resign from his Directorship (subject to any other contractual
obligation or other obligation imposed upon him or the Company by operation of
law), and Company shall have no obligation under this Agreement or otherwise to
continue employ or associate with Director in any position with the Company or
as a Director of the Company except as may be set forth in some other written
agreement between the parties which is then in full force and effect, if any.
SECTION TWO
Indemnification
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2. Company shall indemnify Director to the fullest extent permitted by
applicable law in effect on the date hereof as such law may from time to time be
amended (but, in the case of any such amendment, only to the extent such
amendment permits Company to provide broader indemnification rights and
protection than the law permitted Company to provide before such amendment).
Without in any way diminishing the scope of the indemnification provided by this
section, the Company will indemnify Director if and whenever such Director is or
was involved in any manner (including, without limitation, as a party or as a
witness) in any threatened, pending, or completed proceeding, including, without
limitation, any such proceeding
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brought by or in the right of Company, by reason of the fact that he is or was
an agent or by reason of anything done or not done by him in such capacity,
against expenses and liabilities actually incurred by Director or on his behalf
in connection with the investigation, defense, settlement, or appeal of any such
proceeding. No initial finding by the Board of Directors of the Company, its
counsel, independent counsel, arbitrators, or shareholders of the Company shall
be effective to deprive Director of the protection of this indemnity, nor shall
a court to which Director may apply for enforcement of this indemnity give any
weight to any such adverse finding in deciding any issue before it, as it is
intended Director shall be paid promptly by the Company all amounts necessary to
effectuate the foregoing indemnity in full.
SECTION THREE
Advancement of Expenses
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3. All reasonable expenses incurred by or on behalf of Director shall
be advanced by the Company to Director within twenty (20) days after the receipt
by Company of a written request for an advance or advances of expenses from time
to time, whether prior to or after final disposition of a proceeding (unless
there has been a final determination that
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Director is not entitled to be indemnified for such expenses), including, but
not limited to, any proceeding brought by or in the right of the Company.
Director's entitlement to advancement of expenses shall include those incurred
in connection with any proceeding by Director seeking an adjudication or award
in arbitration pursuant to this Agreement. The requests shall reasonably
evidence the expenses incurred by Director in connection with any such
proceeding. If required by law at the time of any advance, Director hereby
undertakes to repay the amount advanced if it shall ultimately be determined
that Director is not entitled to be indemnified pursuant to the terms of this
Agreement.
SECTION FOUR
PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION
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4.1 Whenever Director believes that he is entitled to
indemnification pursuant to this Agreement, Director shall submit a written
request (the "Request") for indemnification to Company to the attention of the
chairperson of the Board of Directors, with a copy to the secretary. The Request
shall include documentation or information that is necessary for the
determination of entitlement to indemnification (the "Determination") and that
is reasonably available to Director.
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The Determination shall be made not later than sixty (60) days after any
judgment, order, settlement, dismissal, arbitration award, conviction,
acceptance of a plea of nolo contendere or its equivalent, or other disposition
or partial disposition of any proceeding or any other event that could enable
Company to determine Director's entitlement to indemnification. The chairperson
of the Board of Directors, or the secretary shall, promptly on receipt of
Director's Request for indemnification, advise the Board of Directors in writing
that Director has made such Request for indemnification.
4.2 Company shall be entitled to select the forum (the "Forum") in
which Director's entitlement to indemnification will be heard unless a
triggering event (the "Triggering Event") has occurred, as defined in Section
20(g) herein, in which case Director shall be entitled to select the Forum.
Company or Director, as the case may be, shall notify the other party in writing
as to the Forum selected, which selection shall be from among the following:
(a) The stockholders of the Company;
(b) A quorum of the Board consisting of disinterested Directors;
(c) Independent counsel, which counsel shall make the
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Determination in a written opinion; or
(d) A panel of three (3) arbitrators, one of whom is selected by
the Company, another of whom is selected by Director, and the last of whom is
selected by the first two arbitrators so selected; or if for any reason three
(3) arbitrators are not selected within thirty (30) days after the appointment
of the first arbitrator, then the selection of additional arbitrators to
complete the three-person panel shall be made by the American Arbitration
Association tinder its commercial arbitration rules then in effect.
SECTION FIVE
PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS
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5. On making a Request for indemnification, Director shall be presumed
to be entitled to indemnification under this Agreement and Company shall have
the burden of proof to show that such indemnification is expressly prohibited by
applicable law in order to overcome that presumption in reaching any contrary
Determination. If the Forum so empowered to make the Determination shall have
failed to make the requested
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Determination within sixty (60) days after any judgment, order, settlement,
arbitration award, conviction, acceptance of a plea of nolo contendere or its
equivalent, or other disposition or partial disposition of any proceeding or any
other event that could enable the Company to determine Director's entitlement to
indemnification, the requisite Determination of entitlement to indemnification
shall be deemed to have been made and Director shall be absolutely entitled to
indemnification under this agreement, absent (a) misrepresentation or omission
by Director of a material fact in the request for indemnification or (b) a
specific finding that all or any part of such indemnification is expressly
prohibited by law. The termination of any proceeding by judgment, order,
settlement, arbitration award, or conviction, or on a plea of nolo contendere or
its equivalent, shall not of itself (a) adversely affect the rights of Director
to indemnification except as may be provided in this Agreement, (b) create a
presumption that Director did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, or (c) with respect to any criminal action or proceeding, create a
presumption that Director had reasonable cause to believe that his conduct was
unlawful.
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SECTION SIX
REMEDIES OF DIRECTOR IN CASES OF DETERMINATION
NOT TO INDEMNIFY OR TO ADVANCE EXPENSES
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6.1 In the event that (a) an initial Determination is made that
Director is not entitled to indemnification, (b) advances are not made pursuant
to this Agreement, (c) payment has not been timely made following a
Determination of entitlement to indemnification pursuant to this Agreement, or
(d) Director otherwise seeks enforcement of this Agreement, Director shall be
entitled to a final adjudication in an appropriate court of the State of his
entitlement to such indemnification or advance. Alternatively, Director, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the commercial arbitration rules of the American Arbitration
Association then in effect, which award is to be made within ninety (90) days
following the filing of the demand for arbitration (the "Demand"). The Company
shall not oppose Director's right to seek any such adjudication or arbitration
award. In any such proceeding or arbitration Director shall be presumed to be
entitled to indemnification under this Agreement and Company shall have the
burden of proof to overcome that presumption.
6.2 In the event an initial Determination has been made,
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in whole or in part, that Director is not entitled to indemnification, the
decision in the judicial proceeding or arbitration provided in Section 6.1 shall
be made de novo and Director shall not be prejudiced by reason of a
Determination that he is not entitled to indemnification.
6.3 If an initial Determination is made or deemed to have been made
pursuant to the terms of this Agreement that indemnification of Director is not
expressly prohibited by applicable law, Director shall be entitled to
indemnification and the Company shall be bound by such Determination in the
absence of (a) a misrepresentation or omission of a material fact by Director or
(b) a specific finding (which has become final) that all or any part of such
indemnification is expressly prohibited by law.
6.4 The Company shall be precluded from asserting that the procedures
and presumptions of this Agreement are not valid, binding, and enforceable. The
Company shall stipulate in any such court or before any such arbitrator that the
Company is bound by
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all the provisions of this Agreement and is precluded from making any assertion
to the contrary.
6.5 Expenses incurred by Director in connection with his Request for
indemnification under, seeking enforcement of, or to recover damages for breach
of, this Agreement shall be borne by the Company.
SECTION SEVEN
OTHER RIGHTS TO INDEMNIFICATION
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7. Director's rights of indemnification and advancement of expenses
provided by this Agreement shall not be deemed exclusive of any other rights to
which Director may now or in the future be entitled under applicable law, the
Company's Certificate of Incorporation or by-laws, agreement, vote of the
stockholders of the Company, resolution of Company's Directors, or otherwise.
SECTION EIGHT
LIMITATIONS ON INDEMNITY
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8. Company shall not be liable under this Agreement to
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make any payment to Director to the extent that Director has already been
reimbursed pursuant to such Directors' and Officers' insurance (hereinafter "D &
0 Insurance") as Company may maintain for Director's benefit. Notwithstanding
the availability of such D & O Insurance, Director may also claim
indemnification from the Company pursuant to this Agreement by assigning to the
Company any claims under such insurance to the extent Director is paid by
Company.
SECTION NINE
DURATION AND SCOPE OF AGREEMENT; BINDING EFFECT
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9. This Agreement shall continue so long as Director shall be subject
to any possible proceeding by reason of the fact that Director is or was an
agent of the Company and shall be applicable to proceedings commenced or
continued after execution of this Agreement, whether arising from acts or
omissions occurring before or after such execution. This Agreement shall be
binding on the Company and its successors and assigns and shall inure to the
benefit of Director and Director's spouse, assigns, heirs, devisees, executors,
administrators, and other legal representatives.
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SECTION TEN
INTERPRETATION OF AGREEMENT
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10. It is understood and agreed that the parties hereto intend this
agreement to be interpreted and enforced so as to provide indemnification to
Director to the fullest extent now or hereafter permitted by law.
SECTION ELEVEN
HEADINGS
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11. The headings of sections and subsections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
agreement or to affect the construction thereof.
SECTION TWELVE
Severability
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12. If any provisions of this Agreement (or any portion thereof) shall
be held to be invalid, illegal, or unenforceable for any reason whatever: (a)
the validity, legality, and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby; and (b) to the
fullest extent possible, the provisions of this Agreement shall be construed so
as to give effect to the intent manifested
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by the provision held invalid, illegal, or unenforceable.
SECTION THIRTEEN
Identical Counterparts
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13. This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original, but all of which shall
constituted one and the same agreement. Only one such counterpart signed by the
party against whom enforceability is sought shall be required to be produced to
evidence the existence of this Agreement.
SECTION FOURTEEN
Entire Agreement
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14. This Agreement sets forth the entire understanding of the parties
relating to the subject matter herein, and supercedes all prior agreements,
arrangements and understandings, written, or oral, relating to the subject
matter herein. No representation, promise, or inducement has been made by either
party that is not embodied in this Agreement, and neither party shall be bound
or liable for any alleged representation, promise or inducement not set forth.
SECTION FIFTEEN
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Modification and Waiver
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15. No supplement, modification, or amendment to this Agreement shall
be binding unless executed in writing by both of the parties to this Agreement.
No waiver of any provisions of this Agreement shall be deemed to constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
SECTION SIXTEEN
Notice by Director And Defense Of Claims
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16.1 Director agrees promptly to notify Company in writing on being
served with any summons, citation, subpoena, complaint, indictment, information,
or other document relating to any matter that may be subject to indemnification
hereunder, whether civil, criminal, administrative, or investigative; but the
omission so to notify Company will not relieve Company from any liability that
it may have to Director if such omission does not prejudice Company's rights and
if such omission does prejudice Company's rights, it will relieve Company from
liability only to the extent of such prejudice; nor will such omission relieve
Company from any liability that it may have to Director otherwise than under
this Agreement.
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16.2 With respect to any proceeding as to which Director notifies
Company of the commencement thereof:
(a) Company will be entitled to participate therein at its own
expense; and
(b) Except as otherwise provided below, to the extent that it may
wish, Company jointly with any other indemnifying party similarly notified will
be entitled to assume the defense thereof, with counsel reasonably satisfactory
to Director after notice front Company to Director of its election so to assume
the defense thereof, Company will not be liable to Director under this Agreement
for any expenses subsequently incurred by Director in connection with the
defense thereof other than reasonable costs of investigation or as otherwise
provided below. Director shall have the right to employ his own counsel in such
proceeding, but the fees and expenses of such counsel shall be at the expense of
Director unless (1) the employment of counsel by Director has been authorized by
Company, (2) Director shall have reasonably concluded that there may be a
conflict of interest between the Company and Director in the conduct of the
defense of such action or that counsel may not be adequately representing
Director, (3) a Triggering Event shall have occurred, or (4) Company shall not
in fact have employed counsel to assume the defense of such action, in each case
of which the
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fees and expenses of counsel employed by Director shall be at the expense of
Company. Company shall not be entitled to assume the defense of any proceeding
as to which Director shall have made the conclusion provided in (2) above or if
an event in (3) above shall have occurred.
(c) Company shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. Company shall not settle any action or claim in any
manner that would impose any penalty or limitation on Director without
Director's written consent. Neither Company nor Director will unreasonably
withhold their consent to any proposed settlement.
SECTION SEVENTEEN
Notices
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17. All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given if (a) delivered
by hand and receipted for by the party to whom such notice or other
communication shall have been directed, or (b) mailed by certified or registered
mail with postage prepaid, on the third business day after the date on which it
is mailed:
If to Director to the address first set forth above.
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If to Company to the address first set forth above with a copy
of such communication mailed by like means to Hoffinger, Friedland,
Dobrish & Xxxxx, P.C., 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
Either party may furnish the other with written notice of a change of
address in the same manner as providing notice as specified above, in which case
notices must be sent to such new address.
SECTION EIGHTEEN
Governing Law
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18. This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in New York. The legal tribunals of the State of
New York shall be the sole forum for resolving any claim, action or demand
arising out of or pertaining to this Agreement.
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SECTION NINETEEN
Consent to Jurisdiction
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19. Company and Director each irrevocably consent to the jurisdiction
of the Supreme Court of the State of New York in the County of Nassau for all
purposes in connection with any action or proceeding that arises out of or
relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of New York.
SECTION TWENTY
Definitions
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1. For purposes of this Agreement:
(a) "Agent" shall mean any person who (1) is or was a
Director, officer, or employee of the Company or a subsidiary of the Company
whether serving in such capacity or as a Director, officer, employee, agent,
fiduciary, or other official of another entity at the request, for the
convenience, or to represent the interests of the Company or a subsidiary of the
Company or (2) was a Director, officer, or employee of a corporation that was a
predecessor corporation of the Company or a subsidiary of the Company whether
serving in such capacity or as a Director, officer, employee, agent, fiduciary,
or other
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official of another entity at the request, for the convenience, or to represent
the interests of such predecessor corporation.
(b) "Disinterested Director" shall mean a Director of the Company
who is not or was not a party to the proceeding in respect of which
indemnification is being sought by Director.
(c) "Expenses" shall include all direct and indirect costs
(including, without limitation, attorney fees, retainers, court costs,
transcripts, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
all other disbursements or out-of-pocket expenses and reasonable compensation
for time spent by Director for which Director is otherwise not compensated by
the Company or any third party) actually and reasonably incurred in connection
with either the investigation, defense, settlement, or appeal of a proceeding or
establishing or enforcing a right to indemnification under this Agreement,
applicable law, or otherwise; provided, however, that "expenses" shall not
include any judgments, fines, or ERISA excise taxes or penalties.
(d) For purposes of this Agreement any reference to the masculine
shall mean the feminine when the context requires.
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(e) "Independent counsel" shall mean a law firm that, or a member
of a law firm or a sole practitioner who neither is currently nor in the past
five (5) years has been retained to represent: (1) the Company or Director in
any matter material to either party, or (2) any other party to the proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "independent counsel" shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Director in an
action to determine Director's right to indemnification under this Agreement.
(e) "Liabilities" shall mean liabilities of any type whatsoever,
including, but not limited to, judgments, fines, ERISA excise taxes and
penalties, and amounts paid in settlement.
(f) "Proceeding" shall mean any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing,
or any other proceeding whether civil, criminal, administrative, or
investigative.
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(g) "Triggering event" shall mean the acquisition by any person
(other than the Company) of thirty percent (30%) or more of the outstanding
shares of common stock of the Company unless a majority of the entire Board
shall have earlier approved such acquisition.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
Evergood Products Corporation
By:
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Its Authorized Officer
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[Name of Director]
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