EXHIBIT 10.5
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (the "Agreement") is made and entered into as
of this 17th day of March, 2003 by and between Aurora Foods Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxx, an officer of the Company
(the "Officer").
W I T N E S S E T H:
WHEREAS, the Company and the Officer recognize that the legal risks
and potential liabilities associated with lawsuits filed against the officers
of the Company pose a significant deterrent to experienced and capable
individuals serving as officers of the Company;
WHEREAS, the Company recognizes that the result of the foregoing maybe
to encourage those officers who nonetheless determine to serve the Company in
such capacity to act with undue conservatism in the performance of their
duties to the Company and, thus, may result in less effective direction,
supervision and management of the Company's business and operations;
WHEREAS, Section 145 of the Delaware General Corporation Law is not
exclusive of other rights to which those indemnified thereunder may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise and, thus, does not by itself limit the extent to which
the Company may indemnify (and advance expenses to) persons serving as its
officers;
WHEREAS, the Company desires to have the Officer begin or continue to
serve as an officer of the Company, free from undue concern for unpredictable,
inappropriate or unreasonable legal risks and personal liabilities by reason
of performing his duty to the Company or his status as an officer, and the
Officer desires to begin or continue to serve as an Officer of the Company.
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements of the parties contained herein and the mutual benefits to be
derived from this Agreement, the parties hereto covenant and agree as follows:
1. Agreement to Serve. The Officer agrees to begin or to continue to
serve the Company as an officer, provided, however, that nothing contained in
this Agreement shall create or supersede or amend any existing contract of
employment between the Company and the Officer, or the Securityholders
Agreement dated as of April 8, 1998 and the termination of the Officer's
relationship with the Company by either party hereto shall not be restricted
by this Agreement. Should the Officer and the Company agree and subject to any
written employment agreement between the Officer and the Company, the Officer
may also serve another corporation, limited liability company, partnership,
joint venture, employee benefit plan, trust including, without limitation, any
subsidiary or other enterprise affiliated with the Company (any and all of
which are collectively referred to herein as an "Affiliate"), in which event
the terms and provisions of this Agreement shall automatically apply to any
such other service to the full extent permitted by applicable law without the
need for any additional action on the part of the Officer or the Company.
2. Indemnity.
(a) Subject to the conditions and limitations of this Paragraph 2
(including without limitation Paragraph 2(b) below), the
Company shall, to the fullest extent permitted by the Delaware
General Corporation Law as it may then be in effect, indemnify
and hold the Officer and his estate, heirs and legal
representatives (each an "Indemnified Party") harmless if any
of them is, becomes or was a party to or witness or other
participant in, or is or was threatened to be made a party to
or witness or other participant in, any Claim (as defined
below) by reason of (or arising in part out of) an
Indemnifiable Event (as defined below) against any and all
expenses (including attorneys', accountants' and other experts'
fees, disbursements and expenses), judgments, fines, penalties,
excise taxes and amounts paid or to be paid in settlement
incurred by the Indemnified Party in connection with
preparation for or in defense of such Claim (collectively,
"Indemnified Amounts"). "Claim" means any threatened, pending
or completed action, cause of action, suit or proceeding,
whether civil, criminal, administrative or investigative or
other, including, without limitation, an action by or in the
right of any corporation (including without limitation, the
Company) of any type or kind, domestic or foreign, or any
limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise, whether predicated
on foreign, federal, state or local law and whether formal or
informal. "Indemnifiable Event" means any event or occurrence
related to the fact that the Officer is or was or has agreed to
become an Officer or other representative of the Company, or is
or was serving or has agreed to serve in any capacity, at the
request of the Company, in any other corporation, limited
liability company, partnership, joint venture, employee benefit
plan, trust or other enterprise, or by reason of anything done
or not done by the Officer in any such capacity.
(b) Any indemnification under paragraph (a) of this Paragraph 2
shall be made by the Company only as authorized in the specific
case upon a determination that the Officer acted in good faith
and in a manner he reasonably believed to be in or not opposed
to the best interests of the Company and, with respect to any
criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful; provided, however, that no
indemnification shall be made in respect of any Claim as to
which the Officer shall have been adjudged to be liable to the
Company unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
the circumstances of the case, the Indemnified Party is fairly
and reasonably entitled to indemnity for such Indemnified
Amounts which the Court of Chancery of the State of Delaware or
such other court shall deem proper. Such determination (each, a
"Board Action") shall be made (1) by the Board of Directors a
majority vote of the directors who are not a party to such
Claim with respect to an Indemnifiable Event, even if less than
a quorum, or (2) by a committee of such directors appointed by
a majority vote of such directors, even if less than a quorum,
or (3) by the Board of Directors acting upon an opinion in
writing of independent legal counsel, if there are no such
directors or if a majority of such directors so direct.
(c) Notwithstanding anything in the Company's Certificate of
Incorporation, By-Laws, or this Agreement to the contrary, if
so requested by an Indemnified Party the Company shall advance
(an "Expense Advance") (within 30 days of such request) any and
all Indemnified Amounts relating to a Claim to such Indemnified
Party, upon the receipt of a written undertaking by or on
behalf of such Indemnified Party to repay such Expense Advance
if a judgment or other final adjudication adverse to such
Indemnified Party (as to which all rights or appeal therefrom
have been exhausted or lapsed) establishes that such
Indemnified Party, with respect to such Claim, is not eligible
for indemnification.
(d) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Paragraph 2 shall not be deemed
exclusive of any other rights to which an Indemnified Party
seeking indemnification or advancement of expenses may be
entitled under any by-law, other agreement, vote of
stockholders or disinterested directors, policy of insurance or
otherwise, both as to action of the Officer in his official
capacity and as to action in another capacity while holding
such office.
(e) For the purposes of this Paragraph 2, references to "the
Company" shall include, in addition to the resulting
corporation or limited liability company, any constituent
corporation or limited liability company (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors,
officers, employees or agents, so that the Officer if he is or
was a director, officer, employee or agent of such constituent
entity, or is or was serving at the request of such constituent
entity as a director, officer, employee, agent, trustee,
fiduciary or other representative of another corporation,
limited liability company, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the
provisions of this Paragraph 2 with respect to the resulting or
surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(f) Any repeal or modification of relevant provisions of the
Delaware General Corporation Law or any other applicable laws
shall not in any way diminish any rights to indemnification of
an Indemnified Party or the obligations of the Company arising
hereunder except to the extent required by law. All rights and
obligations of the Company and the Officer and the other
Indemnified Parties under this Agreement shall continue in full
force and effect despite the subsequent amendment or
modification of the Company's Certificate of Incorporation or
Bylaws, as such are in effect on the date hereof, and such
rights and obligations shall not be affected by any such
amendment or modification, any resolution of the Board of
Directors or the stockholders of the Company, or any other
corporate action which in any way seeks to diminish any of the
rights of the Officer and the other Indemnified Parties or the
obligations of the Company under this Agreement. If this
Paragraph 2 or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Company
shall nevertheless indemnify each Indemnified Party as to
Indemnified Amounts with respect to any Claim, no matter by
whom brought, and advance expenses (including attorneys',
accountants' and other experts' fees, disbursements and
expenses), in each such Claim to the full extent permitted by
any applicable portion of this Paragraph 2 that shall not have
been invalidated and to the full extent permitted by applicable
law.
(g) Anything herein to the contrary notwithstanding, the settlement
of any Claim that is entered into without the prior written
consent of the Company shall be covered by the terms hereof as
determined by the Company in its sole discretion pursuant to
Paragraph 2(b).
(h) Notwithstanding any other provision of this Agreement, to the
extent that the Indemnified Party has been successful on the
merits or otherwise in defense of any or all Claims relating in
whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including, without limitation,
dismissal without prejudice, the Indemnified Party shall be
indemnified against any and all Indemnified Amounts paid or to
be paid in settlement of such Claim. In connection with any
determination by Board Action or by a court of competent
jurisdiction that the Indemnified Party is not entitled to be
indemnified hereunder, the burden of proof shall be on the
Company to establish that the Indemnified Party is not so
entitled.
3. Payment of Indemnity. Indemnified Amounts and Expense Advances, if
any, provided to any Indemnified Party by the Company under this Agreement
upon the final disposition or conclusion of a Claim unless otherwise ordered
by the court before which such Claim was brought, shall be paid by the Company
(net of all amounts, if any, previously advanced to the Indemnified Parry or
Parties pursuant to Paragraph 2(c)) to the Indemnified Party (or to such other
person as the Indemnified Party may designate in writing to the Company)
within 30 days after the receipt of the Indemnified Party's written request
therefor, which request shall include a reasonably comprehensive accounting of
amounts for which indemnification is being sought and shall refer to one or
more of the provision(s) of this Agreement pursuant to which such claim is
being made. All expenses associated with the indemnification process set forth
in this Agreement or enforcements of rights hereunder shall be paid by the
Company.
4. Termination of an Action is Nonconclusive. The termination of any
Action, no matter by whom brought, by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Officer has not met the applicable standard(s)
of conduct set forth in Paragraph 2 of this Agreement.
5. Partial Indemnification; Interest.
(a) If it is determined by the court before which a Claim is
brought or a court having competent jurisdiction that the
Indemnified Party is entitled to indemnification as to some
claims, issues or matters, but not as to other claims, issues
or matters involved in such Claim, no matter by whom brought,
the court shall authorize the reasonable proration of the
Indemnified Amounts with respect to which indemnification is
sought by the Indemnified Party, among such claims, issues or
matters as the court shall deem appropriate in light of all of
the circumstances of such Claim.
(b) If it is determined by the court before which such Claim was
brought or a court having competent jurisdiction that certain
Indemnified Amounts incurred by the Indemnified Party are, for
whatever reason, unreasonable in amount, the court shall
authorize indemnification to be paid by the Company to the
Indemnified Party for only such amounts as the court shall deem
reasonable in light of all of the circumstances of such Claim.
6. Representation of Company. The Company represents and warrants to
the Officer that neither the execution and delivery of this Agreement by the
Company nor the consummation of the transactions set forth herein or
contemplated hereby will conflict with or result in any violation of, or
constitute a breach of, or a default under, the Certificate of Incorporation
or Bylaws of the Company, or under any contract, instrument, agreement,
understanding, mortgage, indenture, lease, insurance policy, permit,
concession, grant, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company.
7. Insurance.
(a) To the extent the Company maintains at any time 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 other Company director
or officer under such insurance policy. The purchase and
maintenance of such insurance shall not in any way limit or
affect the rights and obligations of the parties hereto, and
the execution and delivery of this Agreement shall not in any
way be construed to limit or affect the rights and obligations
of the Company or of the other parties under any such insurance
policy.
(b) In the event of payment to an Indemnified Party under this
Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery with respect to
such payment of the Indemnified Party, who shall execute and
deliver all instruments, documents, and other papers and shall
perform any and all acts or deeds reasonably necessary or
advisable to secure such rights.
8. Notice to the Company by Officer. The Officer agrees to, and each
other Indemnified Party shall, notify the Company promptly upon being served
with or having knowledge of any citation, summons, complaint, indictment or
any other similar document relating to any Action which is reasonably likely
to result in a claim of indemnification under this Agreement.
9. Continuation of Rights and Obligations. The terms and provisions
of this Agreement shall survive and continue as to the Officer and the other
Indemnified Parties notwithstanding whether the Officer ceases to be an
Officer of the Company or of an Affiliate.
10. Amendment and Modification. This Agreement may be amended,
modified or supplemented only by the written agreement of the Officer and the
Company (subject to approval by the Board of Directors).
11. Assignment. This Agreement shall not be assigned (including
without limitation by operation of law or merger) by the Company or the
Officer without the prior written consent of the other party hereto, except
that the Company may assign its rights and obligations under this Agreement to
any Affiliate for whom the Officer is serving as an executive thereof,
provided, however, that no permitted assignment shall release the assignor
from its obligations hereunder. Subject to the foregoing, this Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, including,
without limitation, any successor to the Company by way of merger,
consolidation and/or disposition of all or substantially all of the capital
stock or assets of the Company.
12. Governing Law. All matters with respect to this Agreement,
including, without limitation, matters of validity, construction, effect and
performance, shall be governed by the internal laws of the State of Delaware
applicable to contracts made and to be performed therein between the residents
thereof (regardless of the laws that might otherwise be applicable under
principles of conflicts of law).
13. Headings. The headings used in this Agreement are for convenience
and reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14. Severability. Without limiting the provisions of Paragraph 2(f)
hereof, if any provision of this Agreement shall be deemed invalid,
unenforceable or inoperative, or if a court of competent jurisdiction
determines that any of the provisions of this Agreement contravene public
policy, this Agreement shall be construed so that the remaining provisions
shall not be affected, but shall remain in full force and effect, and any such
provisions which are held to be invalid, unenforceable or inoperative or which
contravene public policy by such court shall be deemed, without further
action, to be modified, amended and/or limited, but only to the extent
necessary to render the same valid and enforceable, and the Company shall
thereafter indemnify the Indemnified Party against reasonable expenses
(including attorneys', accountants' and other experts' fees, disbursements and
expenses), judgments, fines and amounts incurred in settlement with respect to
any Action, no matter by whom brought, to the full extent permitted by any
applicable provisions of this Agreement that shall not have been invalidated
and to the full extent otherwise permitted by the Delaware General Corporation
Law as it may then be in effect.
15. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been given when delivered by hand or two (2) business days after being
mailed by a recognized international private courier (by way of example, FedEx
and UPS) or by certified or registered mail, return receipt requested, with
postage prepaid:
If to the Officer, to:
Xxxxxxx X. Xxxxxx
000 Xxxxxxxxxx Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
or to such other person or address as the Officer shall furnish to
the Company in writing.
If to the Company, to:
Aurora Foods Inc.
00000 Xxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
or to such other person or address as the Company shall furnish to
the Officer in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
OFFICER: AURORA FOODS INC.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. XxXxxxxxx
-------------------------- --------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. XxXxxxxxx
Title: Executive Vice President and
Chief Financial Officer
