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EXHIBIT 10.15
FORM OF
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "AGREEMENT") is entered into as of
this _____ day of _______________, 1998, by and between NATURAL NUTRITION
GROUP, INC., a Delaware corporation (the "CORPORATION"), and 1~ ("INDEMNITEE").
RECITALS
A. The Corporation is aware that because of the increased
exposure to litigation costs and risks resulting from service to corporations,
talented and experienced persons are increasingly reluctant to serve or
continue serving as directors or executive officers of corporations unless they
are protected by comprehensive liability insurance and indemnification;
B. Plaintiffs often seek damages in such large amounts, and the
costs of litigation may be so great (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is usually beyond the
personal resources of directors and executive officers;
C. Based upon their experience as business managers, the Board of
Directors of the Corporation (the "BOARD") has concluded that, to retain and
attract talented and experienced individuals to serve as directors and
executive officers of the Corporation, it is appropriate for the Corporation to
contractually indemnify its directors and its executive officers, and to assume
for itself liability for expenses and damages in connection with claims against
such directors and executive officers in connection with their service to the
Corporation; and
D. The Corporation believes that it is fair and proper to protect
its directors and executive officers of the Corporation from the risk of
judgments, settlements and other expenses which may occur as a result of their
service to the Corporation.
NOW, THEREFORE, the parties, intending to be legally bound, for good
and valuable consideration, hereby agree as follows:
1. DEFINITIONS.
(a) AGENT. "AGENT" means a director or executive officer
of the Corporation or a director or executive officer of another
foreign or domestic corporation, partnership, joint venture, trust or
other enterprise serving at the request, for the convenience, or to
represent the interests of the Corporation.
(b) CORPORATION. "CORPORATION" means Natural Nutrition
Group, Inc., a Delaware corporation, its successors or assigns, or any
Subsidiary of the Corporation. "SUBSIDIARY" means, and "SUBSIDIARIES"
include, (i) any company of which more than fifty percent (50%) of the
outstanding voting securities are owned directly or indirectly by the
Corporation, or which is otherwise Controlled by the Corporation, and
(ii) any partnership, joint venture, trust, or other entity of which
more than fifty percent (50%)
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of the equity interest is owned directly or indirectly by the
Corporation, or which is otherwise Controlled by the Corporation.
(c) LIABILITIES. "LIABILITIES" means losses, claims,
damages, liabilities, obligations, penalties, judgments, fines,
settlement payments, awards, costs, expenses and disbursements (and
any and all costs, expenses or disbursements in giving testimony or
furnishing documents in response to a subpoena or otherwise),
including, without limitation, all reasonable attorneys' fees, costs,
expenses and disbursements, as and when incurred.
(d) PROCEEDING. "PROCEEDING" means any threatened,
pending, or completed action, suit or other proceeding, whether civil,
criminal, administrative, investigative or any other type whatsoever.
(e) CONTROL. "CONTROL" means, with respect to any
person or entity, the possession, directly or indirectly of the power
to direct or cause the direction of the management and policies of
such person or entity, whether through the ownership of voting
securities, by contract or otherwise.
2. MAINTENANCE OF LIABILITY INSURANCE.
The Corporation hereby covenants and agrees to and with
Indemnitee that, so long as Indemnitee shall continue to serve as an
Agent and thereafter so long as Indemnitee shall be subject to any
claim or Proceeding by reason of the fact that Indemnitee was an Agent
or in connection with Indemnitee's acts as such an Agent, the
Corporation shall obtain and maintain in full force and effect
directors' and officers' liability insurance ("D&O INSURANCE") in
reasonable amounts from established and reputable insurers. In all
policies of D&O Insurance, Indemnitee shall be named as an insured.
3. INDEMNIFICATION OF AGENT.
(a) THIRD PARTY ACTIONS. If Indemnitee is a person who
was or is a party or is threatened to be made a party to any
Proceeding (other than an action by or in the right of the
Corporation) by reason of the fact that Indemnitee is or was an Agent
of the Corporation, or by reason of anything done or not done by
Indemnitee in any such capacity or otherwise at the request of the
Corporation or of its officers, directors or shareholder, the
Corporation shall indemnify, defend and hold harmless Indemnitee
against any and all Liabilities actually and reasonably incurred by
Indemnitee in connection with the investigation, defense, settlement
or appeal of such Proceeding, so long as Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect
to any criminal action or Proceeding, if Indemnitee had no reasonable
cause to believe his or her conduct was unlawful.
(b) DERIVATIVE ACTIONS. If Indemnitee is a person who
was or is a party or is threatened to be made a party, to any
Proceeding by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that Indemnitee is or was an
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Agent of the Corporation, or by reason of anything done or not done by
Indemnitee in any such capacity or otherwise at the request of the
Corporation or of its officers, directors or shareholders, the
Corporation shall indemnify, defend and hold harmless Indemnitee
against all Liabilities actually and reasonably incurred by Indemnitee
in connection with the investigation, defense, settlement or appeal of
such Proceeding, if Indemnitee acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best
interests of the Corporation; provided, however, that no
indemnification under this SECTION 3(B) shall be made in respect of
any claim, issue or matter for which such person is adjudged to be
liable for gross negligence or willful misconduct in the performance
of Indemnitee's duties to the Corporation, unless, and only to the
extent that, the court in which such 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 indemnity for such
Liabilities as the court shall deem proper.
(c) ACTIONS WHERE INDEMNITEE IS DECEASED. If Indemnitee
is a person who was or is a party or is threatened to be made a party
to any Proceeding by reason of the fact that he or she is or was an
Agent of the Corporation, or by reason of anything done or not done by
Indemnitee in any such capacity, and prior to, during the pendency of,
or after completion of, such Proceeding, Indemnitee shall die, then
the Corporation shall indemnify, defend and hold harmless the estate,
heirs and legatees of Indemnitee against any and all Liabilities
incurred by such estate, heirs or legatees in connection with the
investigation, defense, settlement or appeal of such Proceeding on the
same basis as provided for Indemnitee in SECTIONS 3(A) AND 3(B) above.
(d) REDUCTION OF LIABILITIES. The Liabilities covered hereby
shall be net of any payments to or on behalf of Indemnitee by D&O
Insurance carriers or others with respect to the subject Proceeding.
4. INDEMNIFICATION AS WITNESS. Notwithstanding any other
provision of this Agreement, to the extent Indemnitee is, by reason of
the fact that Indemnitee is or was an Agent of the Corporation,
involved in any investigative Proceeding, including but not limited to
testifying as a witness or furnishing documents in response to a
subpoena or otherwise, Indemnitee shall be indemnified against any and
all Liabilities actually and reasonably incurred by or for Indemnitee
in connection therewith.
5. ADVANCEMENT OF LIABILITIES. Subject to the provisions of
SECTION 6(C), until a determination that Indemnitee is not entitled to
be indemnified by the Corporation under the terms hereof, and unless
the provisions of SECTION 9 apply, the Corporation shall reimburse
Indemnitee for Liabilities previously paid by Indemnitee and may
advance Liabilities which the Corporation reasonably determines will
be due and payable by Indemnitee within a reasonable time after a
request for advancement is made by Indemnitee. The execution and
delivery of this Agreement by the Corporation evidences the specific
approval by the Board of the reimbursement and advancement of
Liabilities as provided for in this SECTION 5. As a condition to such
reimbursement and/or advancement, Indemnitee shall, at the request of
the Corporation, undertake in a manner satisfactory to the Corporation
to repay such amounts reimbursed and/or advanced,
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without interest, if it shall ultimately be determined pursuant to
SECTION 7 OR 9 below that Indemnitee is not entitled to be indemnified
by the Corporation under the terms of this Agreement. Subject to the
foregoing, the reimbursement and/or advances to be made hereunder
shall be paid by the Corporation to Indemnitee within twenty (20)
business days following delivery of a written request by Indemnitee to
the Corporation, which request shall be accompanied by vouchers,
invoices and similar evidence documenting the amounts incurred or to
be incurred by Indemnitee.
6. INDEMNIFICATION PROCEDURES.
(a) NOTICE BY INDEMNITEE. Promptly after receipt by
Indemnitee of notice of the commencement or threat of commencement of
any Proceeding, Indemnitee shall, if Indemnitee believes that
indemnification with respect thereto may be sought from the
Corporation under this Agreement, notify the Corporation of the
commencement or threat of commencement thereof, provided that any
failure to so notify the Corporation shall not relieve the Corporation
of its obligations hereunder, except to the extent that such failure
or delay increases the liability of the Corporation hereunder.
(b) D & O INSURANCE. If, at the time of receipt of a
notice pursuant to SECTION 6(A) above, the Corporation has D&O
Insurance in effect, the Corporation shall give prompt notice of the
Proceeding or claim to its insurers in accordance with the procedures
set forth in the applicable policies. The Corporation shall
thereafter take all necessary or desirable action to cause such
insurers to pay all amounts payable as a result of such Proceeding in
accordance with the terms of such policies, and Indemnitee shall not
take any action (by waiver, settlement or otherwise) which would
adversely affect the ability of the Corporation to obtain payment from
its insurers.
(c) ASSUMPTION OF DEFENSE. In the event the Corporation
shall be obligated under this Agreement to pay the Liabilities of
Indemnitee, the Corporation shall be entitled to assume the defense
(with counsel reasonably acceptable to Indemnitee, approval thereof
not to be unreasonably withheld) of the Proceeding to which the
Liabilities relate. The Corporation agrees to promptly notify
Indemnitee upon its election to assume such defense. Once the
Corporation (i) provides Indemnitee with notice of its election to
assume such defense and (ii) obtains approval from Indemnitee of the
counsel retained, the Corporation will not be liable to Indemnitee
under this Agreement for any attorney's fees or other Liabilities
subsequently incurred by the Indemnitee with respect to such
Proceeding, unless (x) the Liabilities incurred by the Indemnitee were
previously authorized by the Corporation or (y) counsel for the
Indemnitee shall have provided the Corporation with an opinion of
counsel stating that there is a likelihood that a conflict of interest
exists between the Corporation and the Indemnitee in the conduct of
any such defense.
7. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) SUCCESSFUL PROCEEDING. To the extent Indemnitee has
been successful, on the merits or otherwise, in the defense of any
Proceeding referred to in SECTIONS 3(A) OR 3(B) above, the Corporation
shall indemnify Indemnitee against all Liabilities incurred
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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, then the Corporation shall indemnify
Indemnitee against all Liabilities actually and reasonably incurred by
or for him in connection with each successfully resolved claim, issue
or matter. For purposes of this SECTION 7(A), the termination of any
Proceeding, or 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 Proceeding, claim, issue or matter, so
long as there has been no finding (either adjudicated or pursuant to
SECTION 7(C) below) that Indemnitee (i) did not act in good faith,
(ii) did not act in a manner reasonably believed to be in, or not
opposed to, the best interests of the Corporation, or (iii) with
respect to any criminal proceeding, had reasonable cause to believe
his or her conduct was unlawful.
(b) OTHER PROCEEDINGS. In the event that SECTION 7(A)
above is inapplicable, the Corporation shall nevertheless indemnify
Indemnitee, unless and only to the extent that the forum listed in
SECTION 7(C) below determines that Indemnitee has not met the
applicable standard of conduct set forth in SECTIONS 3(A) OR 3(B)
above required to entitle Indemnitee to such indemnification.
(c) FORUM IN EVENT OF DISPUTE. The determination that
indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct set forth in
SECTIONS 3(A) OR 3(B) shall be made (i) by the Board, by a majority
vote of the directors who are not parties to such Proceeding, even
though less than a quorum, or (ii) by a committee of disinterested
directors designated by a majority of such disinterested directors,
even though less than a quorum, or (iii) if there are no such
disinterested directors, or if such disinterested directors shall so
direct, by independent legal counsel in a written opinion, or (iv) by
the shareholders of the Corporation. The choice of which forum shall
make the determination shall be made by the Board. The forum shall
act in the utmost good faith to assure Indemnitee a complete
opportunity to present to the forum Indemnitee's case that Indemnitee
has met the applicable standard of conduct.
(d) APPEAL TO COURT. Notwithstanding a determination by
any forum listed in SECTION 7(C) above that Indemnitee is not entitled
to indemnification with respect to a specific Proceeding, Indemnitee
shall have the right to apply to the court in which that Proceeding is
or was pending or any other court of competent jurisdiction for the
purpose of enforcing Indemnitee's right to indemnification pursuant to
this Agreement.
(e) INDEMNITY FOR LIABILITIES IN ENFORCEMENT OF
AGREEMENT. Notwithstanding any other provision in this Agreement to
the contrary, the Corporation shall indemnify Indemnitee against all
Liabilities incurred by Indemnitee in connection with any other
Proceeding between the Corporation and Indemnitee involving the
interpretation or enforcement of the rights of Indemnitee under this
Agreements unless a court of competent jurisdiction finds that the
material claims and/or defenses of Indemnitee in any such Proceeding
were frivolous or made in bad faith.
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8. CONTRIBUTION. If and to the extent that a final adjudication
shall specify that the Corporation is not obligated to indemnify
Indemnitee under this Agreement for any reason (including but not
limited to the exclusion set forth in SECTION 9 hereof), then in
respect of any Proceeding in which the Corporation is jointly liable
with Indemnitee (or would be so liable if joined in such action, suit
or proceeding), the Corporation shall contribute to the amount of
Liabilities reasonably incurred and paid or payable by Indemnitee in
connection with such Proceeding in such proportion as is appropriate
to reflect (i) the relative benefits received by the Corporation, on
the one hand, and Indemnitee, on the other hand, from the transaction
with respect to which such Proceeding arose, and (ii) the relative
fault of the Corporation, on the one hand, and Indemnitee, on the
other hand, in connection with the circumstances which resulted in
such Liabilities, as well as any other relevant equitable
considerations. The relative fault of the Corporation, on the one
hand, and Indemnitee, on the other hand, shall be determined by
reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
the circumstances resulting in such Liabilities. The Corporation
agrees that it would not be just and equitable if contribution
pursuant to this SECTION 8 were determined by pro rata allocation or
any other method of allocation which does not take account of the
foregoing equitable considerations.
9. EXCEPTIONS.
(a) CLAIMS INITIATED BY INDEMNITEE. Notwithstanding any
other provision herein to the contrary, the Corporation shall not be
obligated pursuant to the terms of this Agreement to indemnify or
advance Liabilities to Indemnitee with respect to Proceedings or
claims initiated or brought voluntarily by Indemnitee and not by way
of defense, except with respect to Proceedings brought to establish or
enforce a right to indemnification under this Agreement, but such
indemnification or advancement of expenses may be provided by the
Corporation in specific cases if the Board finds it to be appropriate.
(b) UNAUTHORIZED SETTLEMENTS. Notwithstanding any other
provision herein to the contrary, the Corporation shall not be
obligated pursuant to the terms of this Agreement to indemnify
Indemnitee under this Agreement for any amount paid in settlement of a
Proceeding without the prior written consent of the Corporation to
such settlement.
(c) NO DUPLICATIVE PAYMENT. The Corporation shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.
10. CERTIFICATE OF INCORPORATION AND BY-LAWS. The Corporation
agrees that the Certificate of Incorporation and By-laws of the
Corporation in effect on the date hereof shall not be amended to
reduce, limit, hinder or delay (a) the rights of Indemnitee granted
hereby, or (b) the ability of the Corporation to indemnify Indemnitee
as required hereby. The Corporation further agrees that it shall
exercise the powers granted to it
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under its Certificate of Incorporation, its By-laws and by applicable
law to indemnify any Indemnitee to the fullest extent possible as
required hereby.
11. NON-EXCLUSIVITY. The provisions for indemnification and
advancement of Liabilities set forth in this Agreement shall not be
deemed exclusive of any other rights which the Indemnitee may have
under any provision of law, the Corporation's Certificate of
Incorporation or By-laws, the vote of the Corporation's stockholders
or disinterested directors, other agreements or otherwise.
12. INTERPRETATION OF AGREEMENT. It is understood that the
parties hereto intend this Agreement to be interpreted and enforced so
as to provide indemnification to Indemnitee to the fullest extent now
or hereafter permitted by law.
13. SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for
any reason whatsoever, (i) the validity, legality and enforceability
of the remaining provisions of the Agreement (including, without
limitation, all portions of any paragraphs of this Agreement
containing any such provision held to be invalid, illegal or
unenforceable) shall not in any way be effected or impaired thereby,
and (ii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, all portions of any
paragraph of this Agreement containing any such provision held to be
invalid, illegal, or unenforceable, that are not themselves invalid,
illegal, or unenforceable) shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or
unenforceable and to give effect to SECTION 12 hereof.
14. MODIFICATION AND WAIVER. No supplement, modification or
amendment to 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.
15. SUBROGATION. In the event that the Corporation makes any
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 papers and do all things that may be
necessary to secure such rights, including but not limited to the
execution of such documents as shall be necessary to enable the
Corporation effectively to bring suit to enforce such rights.
16. SURVIVAL, SUCCESSORS, AND ASSIGNS. Indemnitee's rights under
this Agreement shall continue after Indemnitee has ceased acting as an
Agent of the Corporation. The terms of this Agreement shall be
binding on and inure to the benefit of the Corporation and its
successors and assigns and shall be binding on and inure to the
benefit of Indemnitee and Indemnitee's heirs, executors and
administrators.
17. NOTICES. All notices, demands, consents, requests, approvals
and other communications between the parties pursuant to this
Agreement must be in writing and will be deemed given when delivered
in person, one (1) business day after being
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delivered to a nationally recognized overnight courier service, three
(3) business days after being deposited in the U.S. Mail, registered
or certified mail, return receipt requested, or one (1) business after
being sent by facsimile (with receipt acknowledged), to the
Corporation at the address of its principal office in Chicago,
Illinois and to Indemnitee at Indemnitee's address as shown on the
Corporation's records. Indemnitee may change Indemnitee's address for
notice purposes by delivering notice to the Corporation in accordance
with this SECTION 17. All notices sent to the Corporation shall also
be delivered to Xxxxxx Xxxxxx & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxx,
Esq., Facsimile No. (312-902-1061).
18. GOVERNING LAW. This Agreement shall be governed exclusively
by and construed according to the laws of the State of Delaware,
without regard to its principles of conflicts of laws.
19. COUNTERPARTS. This agreement may be executed in counterparts,
each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one
instrument.
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The parties hereto have entered into this Indemnification Agreement
effective as of the date first above written.
NATURAL NUTRITION GROUP, INC.
By:
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Name:
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Its:
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INDEMNITEE:
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(Print Address)
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