INDEMNIFICATION AGREEMENT
This
Indemnification Agreement ("Agreement") is made as of ________ __, 200_ by
and
between Wilshire Enterprises, Inc., a Delaware corporation (the "Company"),
and
______________ ("Indemnitee").
RECITALS
WHEREAS,
highly competent persons have become more reluctant to serve publicly-held
corporations as directors or officers or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of
their
service to and activities on behalf of the corporation;
WHEREAS,
the Board of Directors of the Company (the "Board") has determined that, in
order to attract and retain qualified individuals, the Company will attempt
to
maintain on an ongoing basis, at its sole expense, liability insurance to
protect persons serving the Company and its subsidiaries from certain
liabilities. Although the furnishing of such insurance has been a customary
and
widespread practice among United States-based corporations and other business
enterprises, the Company believes that, given current market conditions and
trends, such insurance may be available to it in the future only at higher
premiums and with more exclusions. At the same time, directors, officers, and
other persons in service to corporations or business enterprises are being
increasingly subjected to expensive and time-consuming litigation relating
to,
among other things, matters that traditionally would have been brought only
against the Company or business enterprise itself. The Certificate of
Incorporation of the Company requires indemnification of the officers and
directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the General Corporation Law of the State of Delaware (the "DGCL").
The DGCL expressly provides that the indemnification provisions set forth
therein are not exclusive, and thereby contemplate that contracts may be entered
into between the Company and members of the board of directors, officers and
other persons with respect to indemnification;
WHEREAS,
the uncertainties relating to such insurance and to indemnification have
increased the difficulty of attracting and retaining such persons;
WHEREAS,
the Board has determined that the increased difficulty in attracting and
retaining such persons is detrimental to the best interests of the Company's
stockholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;
WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify, and to advance expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or
continue to serve the Company free from undue concern that they will not be
so
indemnified;
WHEREAS,
this Agreement is a supplement to and in furtherance of the Certificate of
Incorporation of the Company and any resolutions adopted pursuant thereto,
and
shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder; and
WHEREAS,
Indemnitee does not regard the protection available under the Company's
Certificate of Incorporation and insurance as adequate in the present
circumstances, and may not be willing to serve as an officer or director without
adequate protection, and the Company desires Indemnitee to serve in such
capacity. Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he
be
so indemnified;
NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:
Section
1. Services
to the Company.
Indemnitee agrees to serve as a director or officer of the Company or, at the
request of the Company, as a director, officer, employee, agent or fiduciary
of
another corporation, partnership, joint venture, trust, employee benefit plan
or
other enterprise. Indemnitee may at any time and for any reason resign from
such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position. This Agreement shall
not
be deemed an employment contract between the Company (or any of its subsidiaries
or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that
Indemnitee's employment with the Company (or any of its subsidiaries or any
Enterprise), if any, is at will, and the Indemnitee may be discharged at any
time for any reason, with or without cause, except as may be otherwise provided
in any written employment contract between Indemnitee and the Company (or any
of
its subsidiaries or any Enterprise), other applicable formal severance policies
duly adopted by the Board, or, with respect to service as a director or officer
of the Company, by the Company's Certificate of Incorporation, the Company's
By-laws, and the DGCL. The foregoing notwithstanding, this Agreement shall
continue in force after Indemnitee has ceased to serve as an officer or director
of the Company.
Section
2. Definitions.
As used
in this Agreement:
(a) A
"Change
in Control" shall be deemed to occur upon the earliest to occur after the date
of this Agreement of any of the following events:
i. Acquisition
of Stock by Third Party.
Any
Person (as defined below) is or becomes the Beneficial Owner (as defined below),
directly or indirectly, of securities of the Company representing thirty-five
percent (35%) or more of the combined voting power of the Company's then
outstanding securities;
ii. Change
in Board.
During
any period of two (2) consecutive years (not including any period prior to
the
execution of this Agreement), individuals who at the beginning of such period
constitute the Board, and any new director (other than a director designated
by
a person who has entered into an agreement with the Company to effect a
transaction described in Sections 2(a)(i), 2(a)(iii) or 2(a)(iv)) whose election
by the Board or nomination
for election by the Company's stockholders was approved by a vote of at least
two-thirds 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 so approved, cease for any reason to constitute at least a majority
of the members of the Board;
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iii. Corporate
Transactions.
The
effective date of a merger or consolidation of the Company with any other
entity, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 51%
of
the combined voting power of the voting securities of the surviving entity
outstanding immediately after such merger or consolidation and with the power
to
elect at least a majority of the board of directors or other governing body
of
such surviving entity;
iv. Liquidation.
The
approval by the stockholders of the Company of a complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets; and
v. Other
Events.
There
occurs any other event of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any
similar item on any similar schedule or form) promulgated under the Exchange
Act
(as defined below), whether or not the Company is then subject to such reporting
requirement.
For
purposes of this Section 2(a), the following terms shall have the following
meanings:
(A) "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended.
(B) "Person"
shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act; provided, however, that Person shall exclude (i) the Company, (ii) any
trustee or other fiduciary holding securities under an employee benefit plan
of
the Company, and (iii) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(C) "Beneficial
Owner" shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act; provided, however, that Beneficial Owner shall exclude any Person
otherwise becoming a Beneficial Owner by reason of the stockholders of the
Company approving a merger of the Company with another entity.
(b) "Corporate
Status" describes the status of a person who is or was a director, officer,
employee or agent of the Company or of any other corporation, limited liability
company, partnership or joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the request of the
Company.
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(c) "Disinterested
Director" means a director of the Company who is not and was not a party to
the
Proceeding in respect of which indemnification is sought by
Indemnitee.
(d) "Enterprise"
shall mean the Company and any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise
of
which Indemnitee is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary.
(e) "Expenses"
shall include all reasonable attorneys' fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
and all other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise participating
in, a Proceeding. Expenses also shall include (i) Expenses incurred in
connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost
bond,
supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes
of Section 13(d) only, Expenses incurred by Indemnitee in connection with the
interpretation, enforcement or defense of Indemnitee's rights under this
Agreement, by litigation or otherwise. Expenses, however, shall not include
amounts paid in settlement by Indemnitee or the amount of judgments or fines
against Indemnitee.
(f) "Independent
Counsel" means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years
has been, retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
the
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) 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 Indemnitee in an
action to determine Indemnitee's rights under this Agreement. The Company agrees
to pay the reasonable fees and expenses of the Independent Counsel referred
to
above and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
(g) The
term
"Proceeding" shall include any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and whether of a civil,
criminal, administrative legislative, or investigative nature, including any
appeal therefrom, in which Indemnitee was, is or will be involved as a party,
potential party, non-party witness or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company, by reason of any
action taken by him or of any action on his part while acting as director or
officer of the Company, or by reason of the fact that he is or was serving
at
the request of the Company as a director, officer, employee or agent of another
corporation, limited liability company, partnership, joint venture, trust or
other enterprise, in each case whether or not serving in such capacity at the
time any liability or expense is incurred for which indemnification,
reimbursement, or advancement of expenses
can be provided under this Agreement; except one initiated by an Indemnitee
to
enforce his rights under this Agreement.
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(h) Reference
to "other enterprise" shall include employee benefit plans; references to
"fines" shall include any excise tax assessed 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, such director, officer,
employee or agent with respect to an employee benefit plan, its participants
or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the best interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in
manner "not opposed to the best interests of the Company" as referred to in
this
Agreement.
Section
3. Indemnity
in Third-Party Proceedings.
The
Company shall indemnify Indemnitee in accordance with the provisions of this
Section 3 if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding, other than a Proceeding by or in the right of
the
Company to procure a judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified to the fullest extent permitted by applicable
law against all Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee or on his behalf in connection
with such Proceeding or any claim, issue or matter therein, if Indemnitee 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, in the case of a criminal proceeding
had
no reasonable cause to believe that his conduct was unlawful.
Section
4. Indemnity
in Proceedings by or in the Right of the Company.
The
Company shall indemnify Indemnitee in accordance with the provisions of this
Section 4 if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding by or in the right of the Company to procure
a
judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified to the fullest extent permitted by applicable law against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with such Proceeding or any claim, issue or matter therein, if Indemnitee acted
in good faith and in a manner he reasonably believed to be in or not opposed
to
the best interests of the Company. No indemnification for Expenses shall be
made
under this Section 4 in respect of any claim, issue or matter as to which
Indemnitee shall have been finally adjudged by a court to be liable to the
Company, unless and only to the extent that the Delaware Court of Chancery
or
any court in which the Proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to
indemnification.
Section
5. Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the fullest extent
permitted by applicable law and to the extent that Indemnitee is a party to
(or
a participant in) and is successful, on the merits or otherwise, in any
Proceeding or in defense of any claim, issue or matter therein, in whole or
in
part, the Company shall indemnify Indemnitee against all Expenses actually
and
reasonably incurred by him in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise,
as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him or on his behalf
in
connection with each successfully resolved claim, issue or matter. If the
Indemnitee is not wholly successful in such Proceeding, the Company also shall
indemnify Indemnitee against all Expenses reasonably incurred in connection
with
a claim, issue or matter related to any claim, issue, or matter on which the
Indemnitee was successful. For purposes of this Section and without limitation,
the termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to
such
claim, issue or matter.
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Section
6. Indemnification
For Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the fullest extent
permitted by applicable law and to the extent that Indemnitee is, by reason
of
his Corporate Status, a witness in any Proceeding to which Indemnitee is not
a
party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.
Section
7. Additional
Indemnification.
(a) Notwithstanding
any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee
to
the fullest extent permitted by applicable law if Indemnitee is a party to
or
threatened to be made a party to any Proceeding (including a Proceeding by
or in
the right of the Company to procure a judgment in its favor) against all
Expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For
purposes of Section 7(a), the meaning of the phrase "to the fullest extent
permitted by applicable law" shall include, but not be limited to:
i. to
the
fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL, and
ii. to
the
fullest extent authorized or permitted by any amendments to or replacements
of
the DGCL adopted after the date of this Agreement that increase the extent
to
which a corporation may indemnify its officers and directors.
Section
8. Exclusions.
Notwithstanding any provision in this Agreement, the Company shall not be
obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:
(a) for
which
payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond
the amount paid under any insurance policy or other indemnity provision;
or
(b) for
(i)
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company within the meaning of Section 16(b)
of the Exchange Act (as defined in Section 2(a) hereof) or similar provisions
of
state statutory law or common law, or (ii) any reimbursement of the Company
by
the Indemnitee of any bonus or other incentive-based or equity-based
compensation or of any profits realized by the Indemnitee
from the sale of securities of the Company, as required in each case under
the
Exchange Act (including any such reimbursements that arise from an accounting
restatement of the Company pursuant to Section 304 of the Xxxxxxxx-Xxxxx Act
of
2002 (the "Xxxxxxxx-Xxxxx Act"), or the payment to the Company of profits
arising from the purchase and sale by Indemnitee of securities in violation
of
Section 306 of the Xxxxxxxx-Xxxxx Act), or
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(c) except
as
provided in Section 13(d) of this Agreement, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any
Proceeding (or any part of any Proceeding) initiated by Indemnitee against
the
Company or its directors, officers, employees or other indemnitees, unless
(i)
the Board authorized the Proceeding (or any part of any Proceeding) prior to
its
initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable
law.
Section
9. Advances
of Expenses.
In
accordance with the pre-existing requirement of Article ELEVENTH of the
Certificate of Incorporation of the Company, and notwithstanding any provision
of this Agreement to the contrary, the Company shall advance, to the extent
not
prohibited by law, the Expenses incurred by Indemnitee in connection with any
Proceeding, and such advancement shall be made within thirty (30) days after
the
receipt by the Company of a statement or statements requesting such advances
from time to time, whether prior to or after final disposition of any
Proceeding. Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee's ability to repay the Expenses and without
regard to Indemnitee's ultimate entitlement to indemnification under the other
provisions of this Agreement. Advances shall include any and all reasonable
Expenses incurred pursuing an action to enforce this right of advancement,
including Expenses incurred preparing and forwarding statements to the Company
to support the advances claimed. The Indemnitee shall qualify for advances
upon
the execution and delivery to the Company of this Agreement, which shall
constitute an undertaking providing that the Indemnitee undertakes to repay
the
advance to the extent that it is ultimately determined that Indemnitee is not
entitled to be indemnified by the Company. This Section 9 shall not apply to
any
claim made by Indemnitee for which indemnity is excluded pursuant to Section
8.
Section
10. Procedure
for Notification and Defense of Claim.
(a) Indemnitee
shall notify the Company in writing of any matter with respect to which
Indemnitee intends to seek indemnification or advancement of Expenses hereunder
as soon as reasonably practicable following the receipt by Indemnitee of written
notice thereof. The written notification to the Company shall include a
description of the nature of the Proceeding and the facts underlying the
Proceeding. To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and
is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification following the final disposition of such action,
suit
or proceeding. The omission by Indemnitee to notify the Company hereunder will
not relieve the Company from any liability which it may have to Indemnitee
hereunder or otherwise than under this Agreement, and any delay in so notifying
the Company shall not constitute a waiver by Indemnitee of any rights under
this
Agreement. The Secretary of the Company shall, promptly upon receipt of such
a
request
for indemnification, advise the Board in writing that Indemnitee has requested
indemnification.
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(b) The
Company will be entitled to participate in the Proceeding at its own
expense.
Section
11. Procedure
Upon Application for Indemnification.
(a) Upon
written request by Indemnitee for indemnification pursuant to Section 10(a),
a
determination, if required by applicable law, with respect to Indemnitee's
entitlement thereto shall be made in the specific case: (i) if a Change in
Control shall have occurred, by Independent Counsel in a written opinion to
the
Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change
in
Control shall not have occurred, (A) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board, (B) by a committee
of
Disinterested Directors designated by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board, (C) if there are no
such
Disinterested Directors or, if such Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board, a copy of which shall
be
delivered to Indemnitee or (D) if so directed by the Board, by the stockholders
of the Company; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee's entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) In
the
event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel
shall be selected as provided in this Section 11(b). If a Change in Control
shall not have occurred, the Independent Counsel shall be selected by the Board,
and the Company shall give written notice to Indemnitee advising him of the
identity of the Independent Counsel so selected. If a Change in Control shall
have occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board, in which
event the preceding sentence shall apply), and Indemnitee shall give written
notice to the Company advising it of the identity of the Independent Counsel
so
selected. In either event, Indemnitee or the Company, as the case may be, may,
within ten (10) days after such written notice of selection shall have been
given, deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection; provided,
however,
that
such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of "Independent Counsel" as defined
in Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until such objection
is withdrawn or a court has determined that such objection is without merit.
If,
within twenty (20) days after the later of submission by Indemnitee of a written
request for indemnification pursuant to Section 10(a) hereof and the final
disposition of the Proceeding, no Independent Counsel shall have been selected
and not objected to, either the Company or Indemnitee may petition a court
of
competent jurisdiction for resolution of any objection which shall have been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by the Court or by such other person as the Court shall designate, and the
person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 11(a) hereof. Upon
the due commencement of any judicial proceeding or arbitration pursuant to
Section 13(a) of this Agreement, Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
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Section
12. Presumptions
and Effect of Certain Proceedings.
(a) In
making
a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall, to the fullest
extent not prohibited by law, presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request
for
indemnification in accordance with Section 10(a) of this Agreement, and the
Company shall, to the fullest extent not prohibited by law, have the burden
of
proof to overcome that presumption in connection with the making by any person,
persons or entity of any determination contrary to that presumption. Neither
the
failure of the Company (including by its directors or independent legal counsel)
to have made a determination prior to the commencement of any action pursuant
to
this Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by its directors or independent legal
counsel) that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not
met
the applicable standard of conduct.
(b) Subject
to Section 13(e), if the person, persons or entity empowered or selected under
Section 11 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within sixty (60) days
after
receipt by the Company of the request therefor, the requisite determination
of
entitlement to indemnification shall, to the fullest extent not prohibited
by
law, be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact,
or
an omission of a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with the request for indemnification,
or
(ii) a prohibition of such indemnification under applicable law; provided,
however, that such 60-day period may be extended for a reasonable time, not
to
exceed an additional thirty (30) days, if the person, persons or entity making
the determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto; and provided, further, that the foregoing
provisions of this Section 12(b) shall not apply (i) if the determination of
entitlement to indemnification is to be made by the stockholders pursuant to
Section 11(a) of this Agreement and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination the Board has
resolved to submit such determination to the stockholders for their
consideration at an annual meeting thereof
to be held within seventy-five (75) days after such receipt and such
determination is made thereat, or (B) a special meeting of stockholders is
called within fifteen (15) days after such receipt for the purpose of making
such determination, such meeting is held for such purpose within sixty (60)
days
after having been so called and such determination is made thereat, or (ii)
if
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 11(a) of this Agreement.
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(c) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its
equivalent, shall not (except as otherwise expressly provided in this Agreement)
of itself adversely affect the right of Indemnitee to indemnification or create
a presumption that Indemnitee 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, with respect to any criminal Proceeding, that Indemnitee had reasonable
cause to believe that his conduct was unlawful.
(d) Reliance
as Safe Harbor.
For
purposes of any determination of good faith, Indemnitee shall be deemed to
have
acted in good faith if Indemnitee's action is based on the records or books
of
account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their
duties, or on the advice of legal counsel for the Enterprise or on information
or records given or reports made to the Enterprise by an independent certified
public accountant or by an appraiser or other expert selected with the
reasonable care by the Enterprise. The provisions of this Section 12(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances
in
which the Indemnitee may be deemed to have met the applicable standard of
conduct set forth in this Agreement.
(e) Actions
of Others.
The
knowledge and/or actions, or failure to act, of any director, officer, agent
or
employee of the Enterprise shall not be imputed to Indemnitee for purposes
of
determining the right to indemnification under this Agreement.
Section
13. Remedies
of Indemnitee.
(a) Subject
to Section 13(e), in the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 9 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 11(a) of this Agreement
within ninety (90) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to
Section 5 or 6 or the last sentence of Section 11(a) of this Agreement
within ten (10) days after receipt by the Company of a written request therefor,
(v) payment of indemnification pursuant to Section 3, 4 or 7 of this Agreement
is not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, or (vi) in the event that the Company
or any other person takes or threatens to take any action to declare this
Agreement void or unenforceable, or institutes any litigation or other action
or
Proceeding designed to deny, or to recover from, the Indemnitee the benefits
provided or intended to be provided to the Indemnitee hereunder, Indemnitee
shall be entitled to an adjudication by a court of his entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee,
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. Indemnitee shall commence such proceeding seeking
an
adjudication or an award in arbitration within 180 days following the date
on
which Indemnitee first has the right to commence such proceeding pursuant to
this Section 13(a); provided,
however,
that
the foregoing clause shall not apply in respect of a proceeding brought by
Indemnitee to enforce his rights under Section 5 of this Agreement. The
Company shall not oppose Indemnitee's right to seek any such adjudication or
award in arbitration.
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(b) In
the
event that a determination shall have been made pursuant to Section 11(a) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 13 shall be
conducted in all respects as a de novo
trial,
or arbitration, on the merits and Indemnitee shall not be prejudiced by reason
of that adverse determination. In any judicial proceeding or arbitration
commenced pursuant to this Section 13 the Company shall have the burden of
proving Indemnitee is not entitled to indemnification or advancement of
Expenses, as the case may be.
(c) If
a
determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall
be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 13, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law.
(d) The
Company shall, to the fullest extent not prohibited by law, be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this
Section 13 that the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court or before any
such
arbitrator that the Company is bound by all the provisions of this Agreement.
It
is the intent of the Company that the Indemnitee not be required to incur legal
fees or other Expenses associated with the interpretation, enforcement or
defense of Indemnitee's rights under this Agreement by litigation or otherwise
because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Indemnitee hereunder. The Company shall
indemnify Indemnitee against any and all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after receipt by the Company of a
written request therefor) advance, to the extent not prohibited by law, such
Expenses to Indemnitee, which are incurred by Indemnitee in connection with
any
action brought by Indemnitee for indemnification or advance of Expenses from
the
Company under this Agreement or under any directors' and officers' liability
insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement
of
Expenses or insurance recovery, as the case may be.
(e) Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement
to indemnification under this Agreement shall be required to be made prior
to
the final disposition of the Proceeding.
-11-
Section 14. Non-exclusivity;
Survival of Rights; Insurance; Subrogation.
(a) The
rights of indemnification and to receive advancement of Expenses as provided
by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Company's
Certificate of Incorporation, the Company's By-laws, any agreement, a vote
of
stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit
or
restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in his Corporate Status prior to such
amendment, alteration or repeal. To the extent that a change in Delaware law,
whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Company's
Certificate of Incorporation and 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. No right or remedy herein conferred is intended to
be
exclusive of any other right or remedy, and every other right and remedy shall
be cumulative and in addition to every other right and remedy given hereunder
or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the
concurrent assertion or employment of any other right or remedy.
(b) To
the
extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Company
or of any other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which such person serves at the request of the Company,
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 such
director, officer, employee or agent under such policy or policies. If, at
the
time of the receipt of a notice of a claim pursuant to the terms hereof, the
Company has director and officer liability insurance in effect, the Company
shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective policies. The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
of
such proceeding in accordance with the terms of such policies.
(c) In
the
event of any 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 take all action necessary to secure such
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights.
(d) The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder)
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or
otherwise.
(e) The
Company's obligation to indemnify or advance Expenses hereunder to Indemnitee
who is or was serving at the request of the Company as a director, officer,
employee or agent of any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise
shall be reduced by any amount Indemnitee has actually
received as indemnification or advancement of Expenses from such other
corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise.
-12-
Section
15. Duration
of Agreement.
This
Agreement shall continue until and terminate upon the later of: (a) ten (10)
years after the date that Indemnitee shall have ceased to serve as a director
or
officer of the Company or, at the request of the Company, as a director,
officer, employee, agent or fiduciary of another corporation, partnership,
joint
venture, trust, employee benefit plan or other enterprise or (b) one (1) year
after the final termination of any Proceeding then pending in respect of which
Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 13 of this Agreement relating thereto. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to
the
benefit of Indemnitee and his heirs, executors and administrators.
Section
16. Severability.
If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent permitted by law;
(b)
such provision or provisions shall be deemed reformed to the extent necessary
to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall
be
construed so as to give effect to the intent manifested thereby.
Section
17. Enforcement.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement
and assumed the obligations imposed on it hereby in order to induce Indemnitee
to serve as a director or officer of the Company, and the Company acknowledges
that Indemnitee is relying upon this Agreement in serving as a director or
officer of the Company.
(b) This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof; provided, however, that this Agreement
is
a supplement to and in furtherance of the Certificate of Incorporation of the
Company and applicable law, and shall not be deemed a substitute therefor,
nor
to diminish or abrogate any rights of Indemnitee thereunder.
Section
18. Modification
and Waiver.
No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by the parties thereto. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing
waiver.
-13-
Section
19. Notice
by Indemnitee.
Indemnitee agrees promptly to notify the Company in writing upon being served
with any summons, citation, subpoena, complaint, indictment, information or
other document relating to any Proceeding or matter which may be subject to
indemnification or advancement of Expenses covered hereunder. The failure of
Indemnitee to so notify the Company shall not relieve the Company of any
obligation which it may have to the Indemnitee under this Agreement or
otherwise.
Section
20. Notices. All
notices, requests, demands and other communications under this Agreement 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 said notice or other communication
shall have been directed, (b) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed, (c) mailed by reputable overnight courier and receipted for by the
party
to whom said notice or other communication shall have been directed or (d)
sent
by facsimile transmission, with receipt of oral confirmation that such
transmission has been received:
(a) If
to
Indemnitee, at the address indicated on the signature page of this Agreement,
or
such other address as Indemnitee shall provide to the Company.
(b) If
to the
Company to
Wilshire
Enterprises, Inc.
0
Xxxxxxx
Xxxxxx
Xxxxxx,
XX 00000
Attention:
Chairman of the Board
or
to any
other address as may have been furnished to Indemnitee by the
Company.
Section
21. Contribution.
To the
fullest extent permissible under applicable law, if the indemnification provided
for in this Agreement is unavailable to Indemnitee for any reason whatsoever,
the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes,
amounts paid or to be paid in settlement and/or for Expenses, in connection
with
any claim relating to an indemnifiable event under this Agreement, in such
proportion as is deemed fair and reasonable in light of all of the circumstances
of such Proceeding in order to reflect (i) the relative benefits received by
the
Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of the Company (and
its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).
Section
22. Applicable
Law and Consent to Jurisdiction.
This
Agreement and the legal relations among the parties shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 13(a) of this Agreement,
the Company and Indemnitee hereby irrevocably and unconditionally (i) agree
that
any action or proceeding arising out of or in connection with this Agreement
shall be brought only in the Chancery Court of the State of Delaware (the
"Delaware Court"), and not in any other state or federal court in the United
States of America or any court in any other country, (ii) consent
to submit to the exclusive jurisdiction of the Delaware Court for purposes
of
any action or proceeding arising out of or in connection with this Agreement,
(iii) appoint, to the extent such party is not otherwise subject to service
of
process in the
State
of Delaware, irrevocably RL&F Service Corp., One Xxxxxx Square, 10th Floor,
10th and King Streets, Wilmington, Delaware 19801 as its agent in the State
of
Delaware as such party's agent for acceptance of legal process in connection
with any such action or proceeding against such party with the same legal force
and validity as if served upon such party personally within the State of
Delaware, (iv) waive any objection to the laying of venue of any such action
or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or
to
make, any claim that any such action or proceeding brought in the Delaware
Court
has been brought in an improper or inconvenient forum.
-14-
Section
23. Identical
Counterparts.
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 together shall
constitute one and the same Agreement. Only one such counterpart signed by
the
party against whom enforceability is sought needs to be produced to evidence
the
existence of this Agreement.
Section
24. Miscellaneous.
Use of
the masculine pronoun shall be deemed to include usage of the feminine pronoun
where appropriate. The headings of the paragraphs 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.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed as of
the
day and year first above written.
| WILSHIRE ENTERPRISES, INC. | INDEMNITEE | |||
|
By:
Name:
|
Name:
|
|||
| Office: |
Address:
|
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