INDEMNIFICATION AGREEMENT
EXHIBIT 10.1
This INDEMNIFICATION AGREEMENT is made and entered into as of the ___day of September 2005, by
and between Metrocorp, Inc., an Illinois corporation
(“Metrocorp”), and
,
a member
of Metrocorp’s Board of Directors (the “Director”).
WHEREAS, Metrocorp and the Director each recognize the ongoing and substantial risk of
litigation and other claims being asserted against directors of public companies; and
WHEREAS, in recognition of the need for protection against such litigation and claims to
facilitate the Director’s continued effective service to Metrocorp, Metrocorp desires to provide
for the indemnification, advancement, reimbursement and insurance of certain liabilities and
expenses of the Director, to the full extent permitted by law;
NOW, THEREFORE, in consideration of these premises and of the Director’s continuation of
service to Metrocorp, the parties hereto agree as follows:
1. Indemnification Against Liability. The Director shall be indemnified and held
harmless by Metrocorp, to the full extent permitted by law, against any and all liabilities and
assessments arising out of or related to any threatened, pending or completed action, suit,
proceeding, inquiry or investigation, whether civil, criminal, administrative, or other (each being
hereinafter referred to as an “Action”), including, but not limited to, judgments, fines, penalties
and amounts paid in settlement (whether with or without court approval), and any interest,
assessments, excise taxes or other charges paid or payable in connection with or in respect of any
of the foregoing (each such liability and assessment being hereinafter referred to as a
“Liability”), incurred by the Director and arising out of his or her status as a director or member
of a committee of the Board of Directors of Metrocorp, or by reason of anything done or not done by
the Director in such capacities.
2. Indemnification Against Expense. The Director shall also be indemnified and held
harmless by Metrocorp, to the full extent permitted by law, against any and all attorneys’ fees and
other costs, expenses and obligations, and any interest, assessments, excise taxes or other charges
paid or payable in connection with or in respect of any of the foregoing (each such expense being
hereinafter referred to as an “Expense”) arising out of or relating to any Action, including
expenses incurred by a Director:
(a) in connection with investigating, defending, being a witness or participating in any
Action (other than an Action commenced by the Director against another party, except as provided in
Section 2(b) below) or any appeal of an Action; or
(b) in connection with any claim asserted or action brought by the Director for (i) payment or
indemnification of Liabilities or Expenses or advance payment of Expenses by Metrocorp under this
Agreement, or pursuant to any other agreement, any resolution of Metrocorp’s stockholders or Board
of Directors, any provision of Metrocorp’s Articles of Incorporation or Bylaws, or any statute or
rule of law providing for indemnification, now or hereafter in effect, relating to any Action, or
for specific performance pursuant to Section 17
hereof, and/or (ii) recovery under any directors’ and officers’ liability insurance policy or
policies maintained by Metrocorp, regardless of whether the Director is ultimately determined to be
entitled to such payment, indemnification, advance, or insurance recovery, as the case may be.
3. Partial Indemnification. If the Director is entitled under this Agreement to
payment for some or a portion of any Liability or Expense relating to an Action, but not for the
total amount thereof, Metrocorp shall nevertheless pay the Director for the portion thereof to
which he or she is entitled.
4. Advances. Metrocorp shall pay any and all Expenses incurred by the Director in
connection with any Action, whether or not the Action has been finally disposed of (an “Advance”),
within five days after receipt by Metrocorp of an appropriate request therefor from the Director,
provided that Metrocorp shall have received a Statement of Undertaking, in substantially the form
set forth in Exhibit A (“Statement of Undertaking”), undertaking by or on behalf of the
Director to repay such Advance if it is ultimately determined that the Director is not entitled to
be indemnified by Metrocorp against such Expenses.
5. Demand and Final Payment. Final payments of Liabilities and Expenses provided for
herein shall be made by Metrocorp upon the receipt of a written request therefor by or on behalf of
the Director, and upon the determination that indemnification is proper in the circumstances
because the Director met the applicable standard of conduct set forth in this Indemnification
Agreement. Such determination shall be made (i) by a majority vote of the Metrocorp directors who
are not parties to the Action giving rise to the demand (the “Disinterested Directors”) even though
less than a quorum, or (ii) by a committee of such Disinterested Directors designated by majority
vote of the Disinterested Directors, even though less than a quorum, or (iii) if the Disinterested
Directors so direct, or if there are no Disinterested Directors, by independent legal counsel in a
written opinion, or (iv) by majority vote of Metrocorp’s stockholders. The Director may contest a
determination that he or she is not entitled to indemnification by petitioning a court to make an
independent determination with respect to the Director’s right to indemnification hereunder.
6. Failure to Indemnify. If a claim for payment of any Liability, Expense or Advance
under this Agreement, or pursuant to any other agreement, any resolution of Metrocorp’s
stockholders or Board of Directors, any provision of Metrocorp’s Articles of Incorporation or
Bylaws, or any statute or rule of law providing for indemnification, now or hereafter in effect, is
not paid in full within thirty days, in the case of Liabilities and Expenses, or within five days,
in the case of Advances, after a written request for payment thereof has been received by
Metrocorp, the Director may bring an action against Metrocorp to recover the unpaid amount of such
claim, together with interest thereon. It shall be a defense to any such claim (other than an
action brought to enforce a claim for an Advance) that the Director has not met the standard of
conduct which makes it permissible under this Indemnification Agreement for Metrocorp to indemnify
the Director for the amount claimed, provided, however, that the burden of proving such defense
shall be on Metrocorp and the Director shall be entitled to receive Advances pursuant to Section 4
hereof unless and until such defense shall be finally adjudicated by a court.
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7. Presumption. For purposes of this Agreement, the termination of any Action by
judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea
of nolo contendere, or its equivalent, shall not create a presumption that the Director has not met
any particular standard of conduct required for payment under this Agreement.
8. Change in Control. If there is a Change in Control (as defined below) of Metrocorp,
then the acquiring or successor Person (as defined below), as the case may be (the “Successor”),
shall not diminish or limit in any manner the indemnification rights available to the Director
immediately prior to such Change in Control, whether such rights were available under this
Agreement, or pursuant to any other agreement, any resolution of Metrocorp’s stockholders or Board
of Directors, any provision of Metrocorp’s Articles of Incorporation or Bylaws, or any statute or
rule of law providing for indemnification, now or hereafter in effect. No such Successor shall
cancel, limit or in any way diminish the rights or coverage provided to the Director pursuant to
one or more directors’ and officers’ insurance policies carried by Metrocorp immediately prior to
any such Change in Control. For the purposes of this Agreement, the term “Change in Control” shall
mean (i) the acquisition by any person or entity, or any group of persons or entities acting in
concert (a “Person”) of direct or indirect beneficial ownership of 40% or more of the voting power
or voting securities of Metrocorp, (ii) the acquisition by any Person of direct or indirect
beneficial ownership of 25% or more of the voting power or voting securities of Metrocorp and the
subsequent election of a majority of the members of Metrocorp’s Board of Directors who were not
members of the Board for the two-year period immediately preceding their election, (iii) a transfer
of all or substantially all of Metrocorp’s assets to another Person who is not a wholly owned
subsidiary of Metrocorp, or (iv) merger or consolidation of Metrocorp with another corporation
where, as a result of such merger and consolidation, less than 60% of the outstanding voting
securities of the surviving or resulting corporation shall then be owned by the stockholders of
Metrocorp immediately prior to such merger or consolidation.
9. Director’s Obligations. The Director shall promptly notify Metrocorp in writing of
the institution of any Action which may be the subject of this Agreement and shall keep Metrocorp
generally informed of any such Action. Notices to Metrocorp shall be directed to Metrocorp, Inc.,
0000 0xx Xxxxxx, Xxxx Xxxxxx, XX 00000, Attention: Secretary (or to such other address as Metrocorp
may notify the Director in writing). Notice shall be deemed received three business days after the
date postmarked and shall be sent by certified or registered mail, properly addressed. In addition,
the Director shall give Metrocorp such information and cooperation as Metrocorp shall reasonably
require and as shall be in the Director’s power.
10. Termination. This Agreement may not be terminated except by a writing to that
effect executed by the parties hereto. This Agreement shall continue in effect regardless of
whether the Director continues to serve as a director of Metrocorp.
11. Contract Rights Not Exclusive. The rights of the Director hereunder shall be in
addition to, but not exclusive of, any other right which the Director may have pursuant to any
other agreement, any resolution of Metrocorp’s stockholders or Board of Directors, any provision of
Metrocorp’s Articles of Incorporation or Bylaws, or any statute or rule of law providing for
indemnification, now or hereafter in effect.
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12. Insurance. The rights of the Director hereunder shall also be in addition to any
rights the Director may now or hereafter have under policies of insurance maintained by Metrocorp
or otherwise. Metrocorp may purchase and maintain insurance on behalf of its directors against any
liability asserted against or incurred by them, whether or not Metrocorp would have the power to
indemnify them against such liability, and the Director shall be covered by such policy or policies
to the maximum extent of the coverage available for any director of Metrocorp.
13. Subrogation. In the event of any payment under this Agreement, Metrocorp shall be
subrogated to the extent of such payment to all of the rights of recovery of the Director, who
shall execute all papers required and shall do everything that may be necessary to secure such
rights, including the execution of such documents as may be necessary to enable Metrocorp
effectively to bring suit to enforce such rights.
14. No Duplication of Payments. Metrocorp shall not be liable under this Agreement to
make any payment in connection with any claim made against the Director to the extent the Director
has actually received payment of the amounts otherwise payable hereunder.
15. Modification and Waiver. No supplement, modification or amendment of any of the
provisions of this Agreement and no consent by either party hereto to any departure therefrom by
the other party hereto shall be binding unless executed in writing by both of the parties hereto.
No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall any such waiver constitute a continuing
waiver.
16. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and assigns (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of Metrocorp) and spouses, heirs and personal and
legal representatives.
17. Specific Performance. The failure of Metrocorp to perform any of its obligations
hereunder shall entitle the Director, as a matter of course, to request an injunction from any
court of competent jurisdiction to enforce such obligations. Such right to request specific
performance shall be cumulative and in addition to any other rights and remedies to which the
Director shall be entitled.
18. Severability. If any provision or provisions of this Agreement, or any portion of
any provision hereof, shall be deemed invalid or unenforceable pursuant to a final determination of
any court of competent jurisdiction or as a result of future legislative action, such determination
or action shall be construed so as not to affect the validity or enforceability hereof, and the
remaining provisions, and portions thereof, shall be enforceable to the fullest extent permitted by
law.
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19. Amendments to Laws. This Agreement is intended to provide indemnification and
advancement of expenses to Director to the fullest extent allowed under any applicable law, the
Articles of Incorporation and the Bylaws of Metrocorp. Accordingly, to the extent permitted by
law, if the applicable law, the Articles of Incorporation or the Bylaws of Metrocorp permit greater
indemnification or advancement of expenses than the indemnification and advancement of expenses set
forth herein, or if any amendment is made to any applicable law, the Articles of Incorporation or
the Bylaws of the Company expanding the indemnity permissible, the indemnification or advancement
of expenses obligations, as the case may be, contained herein automatically shall be expanded,
without the necessity of action on the part of any party, to the extent necessary to provide to
Director the fullest indemnification or advancement of expenses, as the case may be, permissible
under any applicable law, the Articles of Incorporation or the Bylaws of Metrocorp.
20. Governing Law. This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the day and year
first above written.
| METROCORP: | ||||||
| METROCORP, INC., | ||||||
| an Illinois corporation | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| DIRECTOR: | ||||||
| Name: | ||||||
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EXHIBIT A
STATEMENT OF UNDERTAKING
STATE
OF |
||||
| COUNTY OF | ||||
I, , being first duly sworn, depose and say as follows:
1. This Statement of Undertaking is submitted pursuant to the Indemnification Agreement dated
, 2005, between Metrocorp, Inc., an Illinois corporation (“Company”), and me.
2. I am requesting the advancement of certain expenses which I have incurred in connection
with an Action.
3. I hereby undertake to repay this advancement of expenses if it is ultimately determined
that I am not entitled to be indemnified by the Company.
4. I am requesting the advancement of expenses in connection with the following Action:
.
I have executed this Statement of Undertaking on .
| Signature | ||||
| Print Name |
Subscribed and sworn to before me on .
| Notary Public in and for | ||||
| said state and county |
My commission expires:
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