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EXHIBIT 10(e)
Form of Indemnification Agreement between DMI Furniture, Inc.
and each of its directors
INDEMNIFICATION AGREEMENT
This is an Indemnification Agreement dated as of _____________________,
1987, between (a) DMI FURNITURE, INC., a Delaware corporation ("DMI"), and (b)
___________________________________ (the "Indemnitee").
1. RECITALS. The Indemnitee is [AN OFFICER OR DIRECTOR, AS APPROPRIATE]
of DMI. Section 7 of DMI's Bylaws, as currently amended, obligates DMI to
indemnify its directors, officers, employees, and agents to the fullest extent
permitted by Section 145 ("Section 145") of the General Corporation Law of the
State of Delaware, as amended (the "DGCL"). In accordance with Section 145 and
in consideration of the Indemnitee's continuing services on DMI's behalf, DMI
and the Indemnitee desire to enter into this Agreement.
2. INDEMNITEE'S SERVICES. The Indemnitee shall diligently administer
DMI's affairs in the position or positions described in paragraph 1. Subject to
any obligation imposed by contract or by operation of law, (a) the Indemnitee
may at any time and for any reason resign from such position or positions, and
(b) DMI may at any time and for any reason (or for no reason) terminate the
Indemnitee's employment in such position or positions.
3. INDEMNIFICATION. DMI shall indemnify the Indemnitee and hold the
Indemnitee harmless against any loss or liability related to or arising from the
Indemnitee's service as a director, officer, employee, or agent of DMI, or of
any subsidiary or affiliate of DMI (a "Subsidiary"), upon the following terms
and conditions:
(a) DMI shall, to the fullest extent permitted by Section 145
as now in effect - and to such greater extent as Section 145 or any other
provision of the DGCL (or of any successor codification of the Delaware
corporation laws) may hereafter from time to time permit - hold the Indemnitee
harmless and indemnify the Indemnitee against all judgments rendered, fines
levied, and other assessments (including amounts paid in settlement of any
claims, if approved by DMI), plus all reasonable costs and expenses (including,
without limitation, attorneys' fees, retainers, court costs, transcript costs,
experts' fees, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, and delivery service fees), incurred
in connection with the defense of any threatened, pending, or completed action
or proceeding, whether civil, criminal, administrative, or investigative (an
"Action"), related to or arising from (1) any actual or alleged act or omission
of the Indemnitee at any time as a director, officer, employee, or agent of DMI
or of any Subsidiary, or (2) the Indemnitee's past, present, or future status as
a director, officer, employee, or agent of DMI or of any Subsidiary.
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(b) Upon presentation from time to time of such invoices,
statements for services rendered, or other similar documentation as DMI may
reasonably request, DMI shall reimburse the Indemnitee for all reasonable costs
and expenses incurred in the defense of any threatened, pending, or completed
Action, as and when such costs are incurred.
(c) DMI shall indemnify the Indemnitee under paragraph 3(a)
only as authorized in a specific case upon a determination that indemnification
of the Indemnitee is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct set forth in Section 145 or in any other
applicable provision of Delaware law. Such determination shall be made, as the
Indemnitee chooses, either (1) by a majority vote of a quorum of DMI's
disinterested directors as contemplated by sub-section (d) of Section 145, as
currently amended, or (2) by independent legal counsel in a written opinion. For
purposes of this paragraph 3(c), "independent legal counsel" shall mean a law
firm (or a member of a law firm) chosen by the Indemnitee that (1) is
experienced in matters of corporation law, and (2) has received a rating of
"a-v" in the most recently published edition of the Xxxxxxxxxx-Xxxxxxx Law
Directory. DMI shall pay the fees and expenses of any independent legal counsel
chosen by the Indemnitee to make the determination contemplated by this
paragraph 3(c).
(d) The indemnification provided by this Agreement shall apply
only to (1) actual or alleged acts or omissions that occur during the
Indemnitee's service as a director, officer, employee, or agent of DMI or of any
Subsidiary, and (2) actual or threatened Actions in which the Indemnitee is
joined or named as a party, but which relate to or arise from alleged acts or
omissions that occurred before the Indemnitee's service as a director, officer,
employee, or agent of DMI or of any Subsidiary, or which relate to acts or
omissions alleged against any former directors, officers, employees, or agents
of DMI or of any Subsidiary.
(e) Nothing in this Agreement shall be deemed or construed to
create any liability of DMI (1) to former directors, officers, employees, or
agents or their predecessors, or to any other person not a party to this
Agreement, or (2) exceeding the liability that DMI may lawfully incur in
accordance with applicable Delaware law.
4. CONDUCT OF LITIGATION.
(a) If any Action is made, brought, or threatened against the
Indemnitee for which the Indemnitee may be indemnified under this Agreement, the
Indemnitee shall, to the extent not inconsistent with any private insurance
coverage obtained by DMI:
(1) Permit DMI to conduct the Indemnitee's defense of
the Action at DMI's expense and with the use of counsel selected by DMI; or
(2) Retain counsel acceptable to the Indemnitee and
DMI to defend or counsel the Indemnitee with respect to the Action, and permit
DMI to monitor and direct the Indemnitee's defense.
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(b) DMI shall at all times have the option to undertake the
Indemnitee's defense of any Action for which the Indemnitee may be indemnified
under this Agreement. If DMI elects to conduct the Indemnitee's defense, the
Indemnitee shall cooperate fully with DMI in the defense of the Action. If DMI
elects to conduct the Indemnitee's defense after the Indemnitee proceeds under
paragraph 4(a)(2), DMI shall reimburse the Indemnitee for the reasonable costs,
including attorneys' fees, incurred by the Indemnitee in enabling DMI to
undertake the Indemnitee's defense.
5. REIMBURSEMENT OF EXPENSES. If DMI makes any payment to the
Indemnitee under this Agreement, and if it is ultimately determined that the
Indemnitee was not entitled to be indemnified by DMI as authorized by Section
145 or any other applicable provision of Delaware law, the Indemnitee shall
promptly repay DMI for all amounts paid to the Indemnitee under this Agreement.
6. ENFORCEMENT OF AGREEMENT. If the Indemnitee makes a claim for
indemnification under this Agreement and DMI refuses to indemnify the
Indemnitee, and if the Indemnitee then prevails in an action or proceeding
brought to enforce this Agreement, DMI shall pay all reasonable costs and
expenses (including attorneys' fees) incurred by the Indemnitee in connection
with the action or proceeding in addition to any other indemnification required
under this Agreement.
7. NOTICE OF CLAIMS. If the Indemnitee receives a complaint, claim, or
other notice of any loss, claim, damage or liability giving rise to a claim for
indemnification under this Agreement, the Indemnitee shall promptly notify DMI
of the complaint, claim or other notice. Any failure to notify DMI, however,
shall not relieve DMI from any liability under this Agreement unless DMI (a) is
materially prejudiced by the failure (such as, for example, where the failure
results in the exclusion or denial of DMI's otherwise available insurance
coverage) and (b) had no actual knowledge of the complaint, claim, or other
notice. In no event shall DMI be obligated to indemnify the Indemnitee for any
settlement of any Action effected without DMI's prior consent.
8. TERMINATION.
(a) This Agreement shall terminate (1) upon termination of the
Indemnitee's service as a director, officer, employee, or agent of DMI and of
any Subsidiary, or (2) upon DMI's written notice to the Indemnitee that, in the
reasonable opinion of DMI, the Indemnitee has not complied with paragraph 4 of
this Agreement. DMI shall not issue any such notice merely because it disagrees
with a business judgment or judgments of the Indemnitee.
(b) The termination of this Agreement shall not:
(1) Terminate DMI's liability to the Indemnitee for
(A) Actions against the Indemnitee related to or arising from acts or omissions
occurring or alleged to have occurred before termination of this Agreement, or
(B) Actions that name or join the Indemnitee as a party, but relate to or arise
from acts or omissions alleged to have occurred before the
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Indemnitee's service as a director, officer, employee, or agent, or acts or
omissions alleged against former directors, officers, employees, or agents.
(2) Render the terms and conditions of this Agreement
inapplicable to any Actions subject to paragraph 8(b)(1).
9. SUBROGATION. If DMI makes any payment to the Indemnitee under this
Agreement, DMI shall be subrogated to the extent of such payment to all of the
Indemnitee's rights of recovery and the Indemnitee shall execute any documents
and take any actions necessary to secure such rights (including execution of any
documents necessary to enable DMI to bring suit to enforce such rights).
10. INSURANCE REIMBURSEMENT. DMI shall not be required to make any
payment of amounts otherwise indemnifiable under this Agreement if and to the
extent that the Indemnitee has otherwise actually received such payment under
any insurance policy, contract, agreement or otherwise.
11. NOTICES. Any notice or other communication required or permitted
under this Agreement shall be deemed given when hand-delivered or sent by
registered mail, postage prepaid and return-receipt requested, to the intended
recipient at the address set forth below or at such other address as the
recipient shall hereafter furnish the sender in writing:
If to the Indemnitee: ___________________________
___________________________
___________________________
___________________________
If to DMI: DMI Furniture, Inc.
00000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
12. GOVERNING LAW. The laws of Delaware shall govern the validity,
interpretation, and construction of this Agreement. Nothing in this Agreement
shall require any unlawful action or inaction by any party.
13. MODIFICATION. No modification of this Agreement shall be binding
unless executed in writing by the Indemnitee and DMI.
14. HEADINGS. All "paragraph" references in this Agreement refer to
numbered paragraphs of this Agreement. Paragraph headings are not part of this
Agreement, but are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or any provision in it.
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15. SOLE BENEFIT. Nothing expressed or referred to in this Agreement is
intended or shall be construed to give any person other than DMI, its successors
and assigns, and the Indemnitee and the Indemnitee's personal representatives,
heirs, or devisees, any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provisions contained herein. The assumption of
obligations and statements of responsibilities and all conditions and provisions
of this Agreement are for the sole benefit of DMI, its successors and assigns,
and the Indemnitee and the Indemnitee's personal representatives, heirs, or
devisees.
IN WITNESS WHEREOF, the Indemnitee and DMI have executed several
originals of this Agreement as of the date first set forth above, but actually
on the dates set forth below.
THE "INDEMNITEE" DMI FURNITURE, INC.
_________________________________ By ______________________________
Name: ___________________________ Title: ___________________________
Date: ___________________________ Date: ____________________________
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