INDEMNIFICATION AGREEMENT
This Agreement, made and entered into this 15th day of September, 1999
("Agreement"), by and between The X.X. Xxxxxxxx Company, a Massachusetts
corporation (the "Corporation"), and ("Indemnitee"):
WHEREAS, the By-laws of the Corporation, as amended (the "By-laws"),
state that the Corporation shall, to the maximum extent permitted from time
to time under applicable law and subject to certain other limitations,
indemnify each person who serves as director or officer of the Corporation
or while serving as a director or officer is or was serving at the request
of the Corporation as a director, officer, trustee, employee or agent of
another organization or who is or was a director, officer or employee who is
or was serving at the request of the Corporation in any capacity with
respect to any employee benefit plan (each, an "Indemnified Position"),
against certain liabilities and expenses; or
WHEREAS, the Corporation has requested that Indemnitee serve in an
Indemnified Position; and
WHEREAS, Indemnitee has relied upon the indemnification provisions in
the By-laws of the Corporation as a source of protection against inordinate
risks of claims and actions against him or her arising out of his or her
service to, and activities on behalf of, the Corporation and is only willing
to continue to serve on behalf of the Corporation on the condition that the
Corporation enter into an agreement in substantially the form hereto.
NOW, THEREFORE, in consideration of Indemnitee's continued service in
an Indemnified Position for or at the request of the Corporation after the
date hereof, the parties hereto hereby agree as follows:
1. Indemnification of Indemnitee.
a. The Corporation hereby agrees, to the maximum extent
permitted from time to time under applicable law, including the laws
of the Commonwealth of Massachusetts, and, in the case of any
Indemnitee serving with respect to an employee benefit plan (each, a
"Plan"), the Employee Retirement Income Security Act ("ERISA"), to
indemnify Indemnitee against all liabilities and expenses, including
amounts paid in satisfaction of judgments, in settlement or as fines
and penalties, and counsel fees, reasonably incurred by Indemnitee in
connection with the defense or disposition of any action, suit or
other proceeding (a "Proceeding"), whether civil, criminal,
administrative or investigative, in which Indemnitee may be involved
or with which Indemnitee may be threatened, by reason of the fact that
Indemnitee is or was or has agreed to serve in an Indemnified
Position.
b. Notwithstanding the foregoing, no indemnification shall be
provided with respect to any matter disposed of by settlement, consent
decree or other negotiated disposition unless:
i. such indemnification shall have been approved by the
holders of the shares of the Corporation's capital stock then
entitled to vote for directors, voting such shares as a single
class, by a majority of the votes cast on the question exclusive
of any shares owned by an interested director or officer; or
ii. such indemnification and such settlement, decree or
disposition shall have been approved as being in the best
interest of the corporation or organization or plan or
participants served, as the case may be, after notice that it
involves such indemnification, by a majority of the
Disinterested Directors (or, if applicable, the sole
Disinterested Director) then in office (whether or not
constituting a quorum); or
iii. if no Disinterested Directors exist, a written
opinion, reasonably satisfactory to the Corporation, of
independent legal counsel selected by the Corporation shall have
been furnished to the Corporation that (A) such indemnification
and such settlement, decree or disposition are in the best
interest of the corporation or organization or plan or
participants served, and (B) if adjudicated, such
indemnification would not be found to have been prohibited by
law.
c. As used in this section, an "interested" director is one
against whom in the capacity of an Indemnified Position the Proceeding
in question or another Proceeding on the same or similar grounds is
then pending or threatened, and a "Disinterested Director" is any
director who is not an interested director. The absence of any
express provision for indemnification shall not limit any right of
indemnification existing independently of this section.
2. Additional Limitations on Indemnity. No indemnity pursuant to
Section 1 hereof shall be paid by the Corporation;
a. except to the extent the aggregate of losses to be
indemnified thereunder exceeds the sum of such losses for which
Indemnitee is indemnified pursuant to any D & O Insurance or Fiduciary
Insurance purchased and maintained by the Corporation;
b. in respect to remuneration paid to Indemnitee if it shall
be determined by a final judgment or other final adjudication that
such remuneration was in violation of law or public policy (and, in
this respect, both the Corporation and Indemnitee have been advised
that the Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal securities
laws is against public policy and is, therefore, unenforceable and
that claims for such indemnification should be submitted to
appropriate courts for adjudication);
c. on account of any Proceeding initiated by Indemnitee
unless such Proceeding was authorized in the specific case by action
of the Board of Directors of the Corporation (the "Board");
d. on account of any suit in which judgment is rendered
against Indemnitee for an accounting of profits made from the purchase
or sale by Indemnitee of securities of the Corporation pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto (the "Exchange Act") or similar provisions of any
federal, state or local statutory law;
e. on account of Indemnitee's conduct which is finally
adjudged to have been knowingly fraudulent or deliberately dishonest,
or to constitute willful misconduct; and
f. on account of Indemnitee's conduct which is the subject of
a Proceeding described in Section 5(b)(ii) or (iii) hereof.
3. Continuation of Obligations. All agreements and obligations of
the Corporation contained herein shall continue during the period Indemnitee
is serving and shall continue thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed
Proceeding, whether civil, criminal or investigative, by reason of the fact
that Indemnitee was serving in an Indemnified Position.
4. Notification and Defense of Claim. Not later than 30 days after
receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof but the omission so to notify the Corporation will not relieve the
Corporation from any liability which it may have to Indemnitee otherwise
than under this Agreement. With respect to any such Proceeding as to which
Indemnitee notifies the Corporation of the commencement thereof:
a. The Corporation will be entitled to participate therein at
its own expense;
b. Except as otherwise provided below, to the extent that it
may wish, the Corporation jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof,
with counsel reasonably satisfactory to Indemnitee. After notice from
the Corporation to Indemnitee of its election so as to assume the
defense thereof, the Corporation will not be liable to Indemnitee
under this Agreement for any legal or other expenses subsequently
incurred by Indemnitee in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ his or her counsel in such
Proceeding but the fees and expenses of such counsel incurred after
notice from the Corporation of its assumption of the defense thereof
shall be at the expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized by the Corporation, (ii)
Indemnitee shall have reasonably concluded that there is a material
conflict of interest between the Corporation and Indemnitee in the
conduct of the defense of such action which would impair the ability
of the Corporation to adequately defend the interests of the
Indemnitee, or (iii) the Corporation shall not in fact have employed
counsel to assume the defense of such action, in each of which cases
the reasonable fees and expenses of Indemnitee's separate counsel
shall be at the expense of the Corporation. The Corporation shall not
be entitled to assume the defense of any Proceeding brought by or on
behalf of the Corporation or as to which Indemnitee shall have made
the conclusion provided for in (ii) above; and
c. The Corporation shall not be liable to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of
any action or claim effected without its written consent. The
Corporation shall be permitted to settle any action except that it
shall not settle any action or claim in any manner which would impose
any penalty or limitation on Indemnitee without Indemnitee's written
consent. Neither the Corporation nor Indemnitee will unreasonably
withhold its consent to any proposed settlement.
5. Advancement and Repayment of Expenses.
a. Expenses, including counsel fees ("Expenses"), reasonably
incurred by Indemnitee in connection with the defense or disposition
of any Proceeding shall be paid from time to time by the Corporation
in advance of the final disposition thereof upon receipt of an
undertaking by Indemnitee to repay the amounts so paid if Indemnitee
ultimately shall be adjudicated to be not entitled to indemnification
pursuant to this Agreement. Such an undertaking may be accepted
without reference to the financial ability of Indemnitee to make
repayment.
b. Notwithstanding the foregoing, the Corporation shall not
be required to advance such expense to Indemnitee if he or she:
i. commences any Proceeding as a plaintiff unless such
advance is specifically approved by a majority of the Board of
Directors of the Corporation;
ii. is a party to any Proceeding brought by the
Corporation which alleges willful misappropriation of corporate
assets by Indemnitee, disclosure of confidential information in
violation of his or her fiduciary or contractual obligations to
the Corporation or any other willful and deliberate breach in
bad faith of his or her duty to the Corporation or its
stockholders;
iii. in the case of persons serving at the request of the
Corporation with respect of any employee benefit plan, is a
party to any Proceeding brought by the Corporation which alleges
willful misappropriation of the assets of such employee benefit
plan by Indemnitee, disclosure of confidential information in
violation of his or her fiduciary or contractual obligations to
such employee benefit plan or any other willful and deliberate
breach in bad faith of his or her duty to such employee benefit
plan or its participants or beneficiaries.
c. The Corporation shall indemnify Indemnitee against any and
all Expenses and, if requested by Indemnitee, shall (within seven
business days of such request) advance such Expenses to Indemnitee,
which are incurred by Indemnitee in connection with any action brought
by Indemnitee for (i) indemnification or advance payment of Expenses
by the Corporation under this Agreement or any other agreement or By-
law of the Corporation now or hereafter in effect; or (ii) recovery
under any directors' and officers' liability insurance policies
maintained by the Corporation, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
d. Notwithstanding any other provision of this Agreement, to
the extent that Indemnitee is, by reason of his Indemnified Position,
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.
6. Procedure for Determination of Entitlement to Indemnification.
a. To obtain indemnification under this Agreement, Indemnitee
shall submit to the Corporation 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.
The Clerk of the Corporation shall, promptly upon receipt of such a
request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
b. Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 6(a) hereof, 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 (as defined in Annex A) shall
have occurred, by independent legal counsel in a written opinion
to the Board, a copy of which shall be delivered to Indemnitee;
ii. if a Change of Control shall not have occurred, (A)
by a majority vote of the Disinterested Directors, even though
less than a quorum of the Board, or (B) if there are no such
Disinterested Directors or, if such Disinterested Directors so
direct, by independent legal counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee or (C)
if so directed by the Board, by the stockholders of the
Corporation; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made
within seven days after such determination.
The Corporation and the Indemnitee shall each 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 Expenses incurred by Indemnitee in so
cooperating with the person, persons or entity making such
determination shall be borne by the Corporation (irrespective of
the determination as to Indemnitee's entitlement to
indemnification), and the Corporation hereby indemnifies and
agrees to hold Indemnitee harmless therefrom.
c. In the event the determination of entitlement to
indemnification is to be made by independent legal counsel pursuant to
Section 6(b) hereof, the independent legal counsel shall be selected
by the Board, provided, however, if a Change of Control shall have
occurred, the independent legal counsel shall be selected by
Indemnitee. For purposes of this Agreement, "independent legal
counsel" means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and would not have a
conflict of interest in representing either the Corporation or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement. The Corporation agrees to pay the reasonable fees of the
independent legal 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.
d. The Corporation shall not be required to obtain the
consent of the Indemnitee to the settlement of any Proceeding which
the Corporation has undertaken to defend if the Corporation assumes
full and sole responsibility for such settlement and the settlement
grants the Indemnitee a complete and unqualified release in respect of
the potential liability. The Corporation shall not be liable for any
amount paid by the Indemnitee in settlement of any Proceeding that is
not defended by the Corporation, unless the Corporation has consented
to such settlement, which consent shall not be unreasonably withheld.
7. Enforcement.
a. The Corporation expressly confirms and agrees that it has
entered into this Agreement and assumed the obligation imposed on the
Corporation hereby in order to induce Indemnitee to continue to serve
in an Indemnified Position, and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity.
b. In the event Indemnitee is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Corporation shall reimburse Indemnitee
for all Indemnitee's reasonable fees and expenses in bringing and
pursuing such action.
8. Remedies of Indemnitee. In the event that (i) a determination
is made pursuant to this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of expenses is not
timely made pursuant to this Agreement, or (iii) no determination of
entitlement to indemnification shall have been made pursuant to this
Agreement within 90 days after receipt by the Corporation of the request for
indemnification, Indemnitee shall be entitled to an adjudication by any
other court of competent jurisdiction, 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.
9. Presumptions and Effect of Certain Proceedings.
a. In making a determination with respect to entitlement to
indemnification or the advancement of Expenses hereunder, the person
or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification or advancement of expenses
under this Agreement if Indemnitee has submitted a request for
indemnification or the advancement of expenses in accordance with
Section 5(a) of this Agreement, and the Corporation shall 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.
b. If the person, persons or entity empowered or selected
under Section 6 of this Agreement to determine whether Indemnitee is
entitled to indemnification shall not have made a determination within
60 days after receipt by the Corporation of the request therefor, the
requisite determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent 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 a prohibition of such indemnification under
applicable law; provided, however, that the foregoing provisions of
this Section 9(b) shall not apply if the determination of entitlement
to indemnification is to be made by the stockholders pursuant to this
Agreement and if:
i. within 15 days after receipt by the Corporation 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 75
days after such receipt and such determination is made thereat;
or
ii. a special meeting of stockholders is called within
15 days after such receipt for the purpose of making such
determination, such meeting is held for such purpose within 60
days after having been so called and such determination is made
thereat.
c. 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:
i. the records or books of account of the Corporation
or relevant enterprise, including financial statements; or
ii. information supplied to Indemnitee by the officers
of the Corporation or relevant enterprise in the course of their
duties; or
iii. the advice of legal counsel for the Corporation or
relevant enterprise; or
iv. information or records given in reports made to the
Corporation or relevant enterprise by an independent certified
public accountant or by an appraiser or other expert selected
with reasonable care by the Corporation or relevant enterprise.
d. The provisions of this Section 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.
10. Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required
and shall do all acts that may be necessary to secure such rights and to
enable the Corporation effectively to bring suit to enforce such rights.
11. Non-Exclusivity of Rights. The right of indemnification hereby
provided shall not be exclusive. Nothing contained herein shall affect any
other rights to indemnification to which Indemnitee may be entitled by
contract, by any entity's charter or by-laws or otherwise under law.
12. Survival of Rights. The rights conferred on Indemnitee by this
Agreement shall continue after he or she has ceased to serve in an
Indemnified Position and shall inure to the benefit of Indemnitee's heirs,
executors and administrators.
13. Severability. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if
any or all of the provisions hereof shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not
affect the validity or enforceability of the other provisions hereof.
14. No Employment Contract. This Agreement shall not be deemed an
employment contract between the Corporation (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee's
employment with the Corporation (or any of its subsidiaries), 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 Corporation (or any of its
subsidiaries), other applicable severance policies adopted by the
Corporation, or, with respect to service as a director or officer of the
Corporation, by the Corporation's Articles of Organization, By-laws, and
applicable law.
15. Governing Law. This Agreement shall be interpreted and enforced
in accordance with the laws of the Commonwealth of Massachusetts.
16. Binding Effect. This Agreement shall be binding upon Indemnitee
and upon the Corporation, its successors and assigns, and shall inure to the
benefit of Indemnitee, his or her heirs, personal representative and assigns
and to the benefit of the Corporation, its successors and assigns.
17. Amendment and Termination. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first above written.
THE X.X. XXXXXXXX COMPANY
By:
_____________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and CEO
INDEMNITEE:
_____________________________________
Name:
ANNEX A
For the purposes of this Agreement, a "Change of Control" means:
a. The acquisition by any person, corporation, partnership, limited
liability company or other entity (a "Person", which term shall include a
group within the meaning of the Exchange Act) of ultimate beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly of 30% or more of either (i) the then
outstanding shares of common stock of the Corporation (the "Outstanding
Corporation Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote generally
in the election of directors (the "Outstanding Corporation Voting
Securities"); provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of Control: (i)
any such acquisition directly from the Corporation, except for acquisition
of securities upon conversion of other securities of the Corporation (ii)
any such acquisition by the Corporation, (iii) any such acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (iv) any
such acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Annex A; or
b. Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election, by the Corporation's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
c. Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Corporation in one or a series of transactions (a "Business Combination"),
in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, immediately following
such Business Combination more than 50% of, respectively, the outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors,
as the case may be, of the Corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result
of such transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Corporation Common Stock and
outstanding Corporation Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) ultimately
beneficially owns, directly or indirectly, 30% or more of, respectively, the
then outstanding shares of common stock of the Corporation resulting from
such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least
a majority of the members of the board of directors of the Corporation
resulting from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
d. Approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
