EXHIBIT 8
FORM OF
INDEMNIFICATION AGREEMENT
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THIS AGREEMENT is made this 26th day of July, 1994, between Shelter Components
Corporation, an Indiana corporation (the "Company"), and _____________________,
("Indemnitee").
Competent and experienced persons are becoming more reluctant to serve as
directors and/or officers of corporations unless they are provided with adequate
protection against claims and actions against them for their activities on
behalf or at the request of such corporations, generally through insurance
and/or indemnification.
Uncertainties in the interpretations of the statues and regulations, laws, and
public policies relating to indemnification of corporate directors and officers
are such as to make adequate, reliable assessment of the risks to which
directors and officer of such corporations may be exposed difficult,
particularly in light of the proliferation of lawsuits against directors and
officers generally.
The Board of Directors of the Company, based upon its business experience, has
concluded that the continuation of present trends in litigation against
corporate directors and officers will inevitably make it more difficult for the
Company to attract and retain directors and officers of the highest degree of
competence committed to the active and effective direction and supervision of
the business and affairs of the company and its subsidiaries and affiliates and
the operation of its and their facilities. In fact, the Board deems such
consequences to be so detrimental to the best interest of the Company that it
has concluded that the Company should act to provide its directors and officers
with enhanced protection against inordinate risks attendant on their positions
in order to assure that the most capable persons otherwise available will be
attracted to, or will remain in, such positions. In such connection, such
directors have further concluded that it is not only reasonable and prudent but
necessary for the Company to obligate itself contractually to indemnify, to the
fullest extent permitted by applicable law, financial responsibility for
expenses and liabilities which might be incurred by such individuals in
connection with claims lodged against them for their decisions and actions in
such capacities.
The General Corporation Law of the State of Indiana, under which law the Company
is organized, empowers a corporation organized in Indiana to indemnify persons
who serve as directors and/or officers of the corporation, or persons who serve
at the request of the corporation as directors and/or officers of an affiliated
corporation and further specifies that the indemnification provided by such law
"shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders, or disinterested directors or otherwise," and further empowers a
corporation to "purchase and maintain insurance" on behalf of such persons
"against any liability asserted against him or incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against any such liability under the
provision of" said law.
The Certificate of Incorporation and By-laws of the Company permit
indemnification to the fullest extent permitted by applicable law.
The Company has: (1) reviewed the type of insurance available to insure the
directors and officers of the Company and of its affiliates against costs,
expenses (including attorneys' fees and disbursements), judgments, penalties,
fines, and amounts paid in settlement actually and reasonably incurred by them
in connection with any action, suit, or proceeding to which they are, or are
threatened to be made, a party by reason of their status or decisions or actions
in such positions; (2) studied the nature and extent of the coverage provided by
such insurance and the cost thereof to the Company; (3) concluded at the present
time not to obtain such insurance in view of the costs and limited benefits
thereof; and (4) concluded, in part based upon the Company's decision not to
obtain such insurance, that it would be in the best interests of the Company and
its stockholders for the Company to enter into agreements to indemnify certain
of such persons in the form of this Agreement. The Company has, moreover,
concluded that it would continue to be in the best interests of the Company to
enter into such agreements with such persons even if the Company should, in the
future, obtain any such insurance inasmuch as such insurance is, and is likely
to continue to be, subject to certain significant exclusions and limitations or
could cease to be reasonably available on any basis.
The Company desires to have Indemnitee serve or continue to serve as a director
and/or officer of the Company, and/or as a director, officer, employee, partner,
trustee, agent, and/or fiduciary of such other corporations, partnerships, joint
ventures, employee benefit plans, trusts, and/or other enterprises (herein
referred to as "Company Affiliate") of which he or she has been or is serving,
or will serve on behalf of or at the request of or for the convenience of, or to
represent the interests of the Company, free from undue concern for
unpredictable, inappropriate, or unreasonable claims for damages by reason of
his or her being, or having been, a director and/or officer of the Company,
and/or a director, officer, employee, partner, trustee, agent, and/or fiduciary
of a Company Affiliate, or by reason of his or her decisions or actions on their
behalf.
Indemnitee is willing to serve, or to continue to serve, or to take on
additional service for, the Company and/or the Company Affiliate in such
aforesaid capacities on the condition that he or she be indemnified as provided
for herein.
Accordingly, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:
1 Services to the Company: Indemnitee shall serve or continue to serve
as a director and/or officer of the Company (in the case of a
Company officer, at the will of the Company or under separate
contract, if any such contract exists or shall hereafter exist),
and/or as a director, and/or officer, or fiduciary of a Company
Affiliate, faithfully and to the best of his or her ability so long
as he or she is duly elected and qualified in accordance with the
provisions of the
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By-laws or other applicable constitutive documents thereof;
provided, however, that: (a) Indemnitee may at any time and for any
reason resign from such position (subject to any contractual
obligations which Indemnitee has assumed apart from this Agreement);
and (b) neither the Company nor the Company Affiliate will have any
obligation under this Agreement to continue the Indemnitee in any
such position.
2 Right to Indemnification: The Company shall, except to the extent
prohibited by applicable law as then in effect, indemnify any
Indemnitee who is or was involved in any manner (including, without
limitation, as a party or witness), or is threatened to be made so
involved, in any threatened, pending, or completed investigation,
claim, action, suit, or proceeding whether civil, criminal,
administrative, or investigative (including, without limitation, any
action, suit, or proceeding by or in the right of the Company to
procure a judgment in its favor) (herein referred to as a
"Proceeding"), by reason of the fact that such person is or was a
director or officer of the Company, and/or is or was serving at the
request of the Company as a director or officer, of any Company
affiliate, against all expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such
Proceeding; provided, however, that, except as provided in Paragraph
3.4, the foregoing shall not apply to a director or officer of the
Company with respect to a Proceeding that was commenced by such
director or officer. Such indemnification shall include the right to
receive payment in advance of any expenses incurred by Indemnitee in
connection with such Proceeding, consistent with the provisions of
applicable law as then in effect.
3 Advancement of Expenses; Procedures; Presumptions and Effect of
Certain Proceedings; Remedies: In furtherance, but not in
limitation, of the foregoing provisions, the following procedures,
presumptions, and remedies shall apply with respect to advancement
of expenses and the right to indemnification hereunder:
3.1 Advancement of Expenses: All reasonable expenses incurred by or on
behalf of the Indemnitee in connection with any Proceeding shall,
after initial approval in accord with paragraph 3.2 be advanced to
the Indemnitee by the Company within 20 calendar days after the
receipt by the Company of a statement or statements from the
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the expenses
incurred by the Indemnitee and, if required by law at the time of
such advance, shall include or be accompanied by an undertaking by
or on behalf of the Indemnitee to repay the amounts advanced if it
should
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ultimately be determined that the Indemnitee's is not entitled to be
indemnified against such expenses hereunder.
3.2 Procurement for Determination of Entitlement to Indemnification:
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3.2.1 To obtain indemnification as herein provided, as Indemnitee shall
submit to the President or Secretary of the Company a written
request, including such documentation and information as is
reasonably available to the Indemnitee and reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification (herein referred to as the "Supporting
Documentation"). The determination of the Indemnitee's entitlement
to indemnification shall be made not later than 60 calendar days
after receipt by the Company of the written request for
Indemnification together with the Supporting Documentation. The
Secretary or President of the Company shall, promptly upon receipt
of such a request for indemnification, advise the Board of Directors
in writing that the Indemnitee has requested indemnification.
3.2.2 The Indemnitee's entitlement to indemnification hereunder shall be
determined in one of the following ways (each of which shall give
effect to the presumptions set forth in Paragraph 3.3): (a) by a
majority vote of the Disinterested Directors (as hereinafter
defined) if they constitute a quorum of the Board of Directors; (b)
by a written opinion of Independent Counsel (as hereinafter defined)
if a quorum of the Board of Directors consisting of Disinterested
Directors is not obtainable or, even if obtainable, a majority of
such Disinterested Directors so directs; (c) by the stockholders of
the Company (but only if a majority of the Disinterested Directors,
if they constitute a quorum of the Board of Directors, presents the
issue of entitlement to indemnification to the stockholders for
their determination); or (d) as provided in Paragraph 3.3. In the
event that subparagraph 3.2.2 applies, stockholder approval will be
deemed to have been received if the holders of a majority of the
Company's total common stock outstanding vote in favor of such
approval.
3.2.3 If the determination of entitlement to indemnification is to be made
by Independent Counsel pursuant to Subparagraph 3.2.2(b) above, a
majority of the Disinterested Directors, if any, shall select the
Independent Counsel to which the Indemnitee does not reasonably
object. If there shall be no Disinterested Directors, such
Independent Counsel shall be selected by a majority of the
Directors, but only an Independent Counsel to which no Indemnitee
reasonably objects.
3.3 Presumptions and Effect of Certain Proceedings: Except as otherwise
expressly provided herein, the Indemnitee shall be presumed to be
entitled to indemnification hereunder upon submission of a request
for indemnification
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together with the Supporting documentation in accordance with
Paragraph 3.2.1, and thereafter the Company shall have the burden
of proof to overcome that presumption in reaching a contrary
determination. In any event, if the person or persons empowered
under Paragraph 3.2 to determine entitlement to indemnification
shall not have been appointed or shall not have made a determination
within 60 calendar days after receipt by the Company of the request
therefor together with the Supporting Documentation, the Indemnitee
shall be deemed to be entitled to indemnification, and the
Indemnitee shall be entitled to such indemnification unless the
Company establishes as provided in the final sentence of Paragraph
3.4.2 or by written opinion of Independent Counsel that: (a) the
Indemnitee misrepresented or failed to disclose a material fact in
making the request for indemnification or in the Supporting
Documentation; or (b) such indemnification is prohibited by law. The
termination of any Proceeding described in Paragraph 2, 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, of itself, adversely affect the right of the Indemnitee
to indemnification or create a presumption that the Indemnitee did
not act in good faith and in a manner which the Indemnitee
reasonably believed to be in, or not opposed to, the best interests
of the Company or, with respect to any criminal Proceeding, that the
Indemnitee had reasonable cause to believe that his or her conduct
was unlawful.
3.4 Remedies of Indemnitee:
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3.4.1 In the event that a determination is made pursuant to Paragraph 3.2
that the Indemnitee is not entitled to indemnification hereunder:
(a) the Indemnitee shall be entitled to seek an adjudication of his
or her entitlement to such indemnification either, at the
Indemnitee's option, in (x) an appropriate court of the State of
Indiana or any other court of competent jurisdiction, or (y) an
arbitration to be conducted by a single arbitrator, selected by
mutual agreement of the Company and Indemnitee (or, failing such
agreement by the then sitting Chief Judge of the United States
District Court for the Northern District of Indiana), pursuant to
the commercial arbitration rules of the American Arbitration
Association; (b) any such judicial proceeding or arbitration shall
be de novo, and the Indemnitee shall not be prejudiced by reason of
such adverse determination; and (c) in any such judicial proceeding
or arbitration, the Company shall have the burden of proving that
the Indemnitee is prohibited by applicable law. If any such
determination is made, the Indemnitee shall be entitled, on five
days' written notice to the Secretary of the Company, to receive the
written report of the persons making such determination, which
report shall include the reasons and factual findings, if any, upon
which such determination was based.
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3.4.2 If a determination shall have been made, or deemed to have been
made, pursuant to Paragraph 3.2 or 3.3 that the Indemnitee is
entitled to indemnification, the Company shall be obligated to pay
the amounts constituting such indemnification within five days after
such determination has been made or deemed to have been made and
shall be conclusively bound by such determination unless the Company
establishes as provided in the final sentence of this paragraph
that: (a) the Indemnitee misrepresented or failed to disclose a
material fact in making the request for indemnification or in the
Supporting Documentation; or (b) such indemnification is prohibited
by law. If either (x) advancement of expenses is not timely made
pursuant to Paragraph 3.1, or (y) payments of indemnification is not
made within five calendar days after a determination of entitlement
to indemnification has been made or deemed to have been made
pursuant to Paragraph 3.2 or 3.3, the Indemnitee shall be entitled
to seek judicial enforcement of the Company's obligation to pay to
the Indemnitee such advancement of expenses or indemnification.
Notwithstanding the foregoing, the Company may bring an action, in
an appropriate court in the State of Indiana or any other court of
competent jurisdiction, contesting the right of the Indemnitee to
receive indemnification hereunder due to the occurrence of an event
described in subclause (a) or (b) of this clause (3.4.2) (herein
referred to as a "Disqualifying Event"); provided, however, that in
any such action the Company will have the burden of proving the
occurrence of such Disqualifying Event.
3.4.3 The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Paragraph 3.4
that the procedures and presumptions of this paragraph 3 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
of the provisions of this Agreement.
3.4.4 If the Indemnitee, pursuant to this Paragraph 3.4, seeks a judicial
adjudication of, or an award in arbitration to enforce, his or her
rights under, or to recover damages for breach of, this Agreement,
the Indemnitee shall be entitled to recover from the Company, and
shall be indemnified by the Company against, any expenses actually
and reasonably incurred by the Indemnitee if the Indemnitee prevails
in such judicial adjudication or arbitration. If it shall be
determined in such judicial adjudication or arbitration that the
Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses
incurred by the Indemnitee in connection with such judicial
adjudication or arbitration shall be prorated accordingly.
3.5 Definitions: For purposes of this Paragraph 3:
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"Disinterested Director" means a director of the Company who is not
or was not a party to the Proceeding in respect of which
indemnification is sought by the Indemnitee.
"Independent Counsel" means a law firm or a member of a law firm
that neither presently is, nor in the past five years has been,
retained to represent: (a) the Company or the Indemnitee in any
matter material to either such party; or (b) 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 under the laws of the State of
Indiana would have a conflict of interest in representing either the
company or the Indemnitee in an action to determine the Indemnitee's
rights hereunder.
4. Other Rights to Indemnification: The indemnification and advancement
of costs and expenses (including attorneys' fees and disbursements)
provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may now or in the future be
entitled under any provision of applicable law, the Certificate of
Incorporation, or any By-law of the Company or any other agreement,
or any vote of directors or stockholders or otherwise, whether as to
action in his or her official capacity or in another capacity while
occupying any of the positions or having any of the relationships
referred to in Paragraph 1 of this Agreement.
5. Duration of Agreement:
5.1 This Agreement shall be effective from the date hereof, and shall
continue until and terminate upon the later of: (i) the tenth
anniversary after Indemnitee has ceased to occupy any of the
positions or have any of the relationships described in Paragraph 1
of this Agreement; or (ii) (a) the final termination or resolution
of all Proceedings with respect to Indemnitee commenced during such
ten-year period, and (b) either (x) receipt by Indemnitee of the
indemnification to which he or she is entitled hereunder with
respect thereto, or (y) a final adjudication or binding arbitration
that Indemnitee is not entitled to any further indemnification with
respect thereto, as the case may be.
5.2 This Agreement shall be binding upon the Company and its successors
assigns and shall inure to the benefit of the Indemnitee and his or
her heirs, devisees, executors, administrators, or other legal
representatives.
6 Severability: If any provision or provisions of this Agreement are
held to be invalid, illegal, or unenforceable under any particular
circumstances or for any
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reason whatsoever: (a) the validity, legality, and enforceability of
the remaining provisions of this Agreement (including, without
limitation, all other portions of any paragraph or clause of this
Agreement that contains any provision that has been found to be
invalid, illegal, or unenforceable, that are not themselves invalid,
illegal, or unenforceable) or the validity, legality, or
enforceability under any other circumstances shall not in any way be
affected or impaired thereby; and (b) to the fullest extent possible
consistent with applicable law, the provisions of this Agreement
(including, without limitation, all other portions of any paragraph
or clause of this Agreement that contains any such provision that
has been found to be invalid, illegal, or unenforceable, that are
not themselves invalid, illegal, or unenforceable) shall be deemed
revised and shall be construed so as to give effect to the intent
manifested by this Agreement (including the provision held invalid,
illegal, or unenforceable).
7 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.
8 Headings: The headings of the paragraphs of this Agreement are
inserted for convenience and shall not be deemed to constitute part
of this Agreement or to affect the construction thereof.
9 Modification and Waiver: No supplement, modification, or amendment
of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
10 Notification and Defense of Claim: Indemnitee agrees to notify the
Company promptly in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information, or other
document relating to any matter which may be subject to
indemnification hereunder, whether civil, criminal, or
investigative; provided, however, that the failure of Indemnitee to
give such notice to the Company shall not adversely affect
Indemnitee's rights under this Agreement except to the extent the
Company shall have been materially prejudiced as a direct result of
such failure. Nothing in this Agreement shall constitute a waiver of
the Company's right to seek participation at its own expense in any
Proceeding which may give rise to indemnification hereunder.
11 Notices: All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if: (i)
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delivered by hand and receipted for by the party to whom said notice
or other communication shall have been directed; or (ii) mailed by
certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed, in either
case:
(a) if to Indemnitee, at the address indicated on the signature
page hereof;
(b) if to the Company:
Shelter Components Corporation
00000 Xxxxxx Xxxx 0
Xxxxxxx, Xxxxxxx 00000
or to such address as may have furnished to either party by the
other party.
12. Governing Law: The parties hereto agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws
of the State of Indiana.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
SHELTER COMPONENTS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, President
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Indemnitee
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