EXHIBIT 10.22
INDEMNITY AGREEMENT
This Agreement is made as of the 17th day of July, 1997, by and
between MANATRON, INC., a Michigan corporation (the "Corporation"), with
its address at 0000 Xxxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000; and _____
____________ ("Indemnitee"), an officer of the Corporation, who resides at
0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
WHEREAS, it is essential to the Corporation to retain and attract
as Directors and Officers the most capable persons available; and
WHEREAS, the substantial increase in corporate litigation
subjects Directors and Officers to expensive litigation risks at the same
time that the availability of Directors' and Officers' liability insurance
has been severely limited; and
WHEREAS, it is now and has always been the express policy of the
Corporation to indemnify its Directors and Officers so as to provide them
with the maximum possible protection permitted by law; and
WHEREAS, Indemnitee does not regard the protection available
under the Corporation's Articles of Incorporation and insurance as adequate
in the present circumstances, and may not be willing to serve as an Officer
without adequate protection, and the Corporation desires Indemnitee to
serve in such capacity.
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:
SECTION 1. DEFINITIONS. As used in this Agreement:
(a) "Expenses" shall mean all costs, expenses and
obligations paid or incurred in connection with investigating,
litigating, being a witness in, defending or participating in, or
preparing to litigate, defend, be a witness in or participate in
any matter that is the subject of a Proceeding (as defined
below). including attorneys' and accountants' fees and court
costs.
(b) "Proceeding" shall mean any threatened, pending or
completed action, suit or proceeding, or any inquiry or
investigation, whether brought by or in the right of the
Corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which Indemnitee may
be or may have been involved as a party or otherwise by reason of
the fact that Indemnitee is or was a Director, Officer, employee,
agent or fiduciary of the Corporation, or by reason of any action
taken by Indemnitee or any inaction on Indemnitee's part while
acting as a Director, Officer, employee, agent or fiduciary of
the Corporation, or by reason of the fact that Indemnitee is or
was serving at the request of the Corporation as a Director,
Officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise.
(c) "Resolution Costs" shall include any amount paid in
connection with a Proceeding and in satisfaction of a judgment,
fine, penalty or any amount paid in settlement.
SECTION 2. AGREEMENT TO SERVE. Indemnitee agrees to serve as a
Director and/or Officer of the Corporation for so long as Indemnitee is
duly elected or appointed or until the tender of Indemnitee's written
resignation.
SECTION 3. INDEMNIFICATION. The indemnification provided under this
Agreement shall be as follows:
(a) The Corporation shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by Indemnitee in
connection with any Proceeding. Additionally, in any Proceeding
other than a Proceeding by or in the right of the Corporation,
the Corporation shall indemnify Indemnitee against all Resolution
Costs actually and reasonably incurred by Indemnitee in
connection with such Proceeding. No indemnification shall be
made under this subsection:
(i) With 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;
(ii) 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 or similar provisions of any federal, state, or
local law;
(iii) On account of Indemnitee's conduct which is
determined by a final judgment or other final adjudication
to have been knowingly fraudulent, deliberately dishonest or
willful misconduct;
(iv) On account of Indemnitee's conduct which by a
final judgment or other final adjudication is determined to
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have been in bad faith, in opposition to best interests of
the Corporation or produced an unlawful personal benefit;
(v) With respect to a criminal proceeding if the
Indemnitee knew or reasonably should have known that
Indemnitee's conduct was unlawful; or
(vi) If a final decision by a court having jurisdiction
in the matter shall determine that such indemnification is
not lawful.
(b) In addition to any indemnification provided under
Subsection 3(a) above, the Corporation shall indemnify Indemnitee
against any Expenses or Resolution Costs incurred by Indemnitee,
regardless of the nature of the Proceeding in which Expenses
and/or Resolution Costs were incurred, if such Expenses or
Resolution Costs would have been covered under the Directors' and
Officers' liability insurance policies in effect on the effective
date of this Agreement or any such insurance policies which
become effective on any subsequent date.
(c) In addition to any indemnification provided under
Subsections 3(a) and 3(b) above, the Corporation hereby provides
Indemnitee, to the fullest extent allowed by law as presently or
hereafter enacted or interpreted, with indemnification against
any Expenses and/or Resolution Costs incurred by Indemnitee in
connection with any Proceeding. To the extent a change in the
Michigan Business Corporation Act (whether by statute or judicial
decision) permits greater indemnification, either by agreement or
otherwise, than presently provided by law or this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by such
change.
(d) Notwithstanding anything in this Agreement to the
contrary, prior to a Change in Control (as hereafter defined),
Indemnitee shall not be entitled to indemnification pursuant to
this Agreement in connection with any Proceeding initiated by
Indemnitee against the Corporation or any Director, Officer,
employee, agent or fiduciary of the Corporation (in such
capacity) unless the Corporation has joined in or consented to
the initiation of such Proceeding.
(e) Without limiting Indemnitee's right to indemnification
under any other provision of this Agreement, the Corporation
shall indemnify Indemnitee in accordance with the provisions of
this Subsection if Indemnitee is a party to or threatened to be
made a party to or otherwise involved in any Proceeding by or in
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the right of the Corporation to procure a judgment in its favor
by reason of the fact that Indemnitee was or is a Director and/or
Officer of the Corporation or is or was serving at the request of
the Corporation as a Director, Officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against all Expenses actually and reasonably incurred
by Indemnitee and any amounts paid by Indemnitee in settlement of
such Proceeding, but only if Indemnitee acted in good faith in a
manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no
indemnification shall be made under this Subsection in respect of
any claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Corporation for active negligence or
intentional misconduct in the performance of his duty to the
Corporation, unless and only to the extent that any 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 amounts as such
court shall deem proper.
SECTION 4. PAYMENT OF INDEMNIFICATION.
(a) Expenses incurred by the Indemnitee and subject to
indemnification under Section 3 above shall be paid directly by
the Corporation or reimbursed to the Indemnitee within two (2)
days after the receipt of a written request of the Indemnitee
providing that Indemnitee undertakes to repay any amount paid or
advanced under this Section to the extent that it is ultimately
determined that Indemnitee is not entitled to such
indemnification.
(b) Except as otherwise provided in Section 4(a) above, any
indemnification under Section 3 above shall be made no later than
thirty (30) days after receipt by the Corporation of the written
request of Indemnitee, unless within said 30-day period the Board
of Directors, by a majority vote of a quorum consisting of
Directors who are not parties to such Proceeding, determines that
the Indemnitee is not entitled to the indemnification set forth
in Section 3 or unless the Board of Directors refers the
Indemnitee's indemnification request to independent legal
counsel. In cases where there are no Directors who are not
parties to the Proceeding, the indemnification request shall be
referred to independent legal counsel. If the indemnification
request is referred to independent legal counsel, then Indemnitee
shall be paid no later than forty-five (45) days after
Indemnitee's initial notice to the Corporation unless within that
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time independent legal counsel presents to the Board of Directors
a written opinion stating in unconditional terms that
indemnification is not allowed under Section 3 of this Agreement.
If a Change in Control (as defined in Section 5) occurs and
results in individuals who were Directors prior to the
circumstances giving rise to the Change in Control ceasing for
any reason to constitute a majority of the Board of Directors,
the above determination, if any, shall be made by independent
legal counsel and not the Board of Directors. The Corporation
agrees to pay the reasonable fees of the independent legal
counsel and to fully indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and
damages arising out of or relating to this Agreement or its
engagement pursuant thereto. If there has not been a Change in
Control as defined in Section 5, independent legal counsel shall
be selected by the Board of Directors or the executive committee
of the board, and if there has been a Change in Control, the
independent legal counsel shall be selected by Indemnitee.
(c) The right to indemnification payments as provided by
this Agreement shall be enforceable by Indemnitee in any court of
competent jurisdiction. The burden of proving that
indemnification is not permitted by this Agreement shall be on
the Corporation or on the person challenging the indemnification.
Neither the failure of the Corporation, including its Board of
Directors, to have made a determination prior to the commencement
of any Proceeding that indemnification is proper, nor an actual
determination by the Corporation, including its Board of
Directors or independent legal counsel, that indemnification is
not proper, shall bar the action or create a presumption that
Indemnitee is not entitled to indemnification under this
Agreement. If the Board of Directors or independent legal
counsel determines in accordance with Section 4(b) above that
Indemnitee would not be permitted to be indemnified in whole or
in part, Indemnitee shall have the right to commence litigation
in any court in the State of Michigan having subject matter
jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any such
determination by the Board of Directors or independent legal
counsel, and the Corporation hereby consents to service of
process and to appear in any such proceeding. Expenses incurred
by Indemnitee in connection with successfully establishing
Indemnitee's right to indemnification, in whole or in part, shall
also be reimbursed by the Corporation.
SECTION 5. ESTABLISHMENT OF TRUST. In the event of a Potential
Change in Control of the Corporation, as hereafter defined, the Corporation
shall, upon written request by Indemnitee, create a trust for the benefit
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of the Indemnitee and from time to time upon written request of Indemnitee
shall fund such trust in an amount sufficient to satisfy any and all
Expenses or Resolution Costs that may properly be subject to
indemnification under Section 3 above anticipated at the time of each such
request. The amount or amounts to be deposited in the trust pursuant to
this funding obligation shall be determined by a majority vote of a quorum
consisting of Directors who are not parties to such Proceeding, the
executive committee of the Board of Directors or the President of the
Corporation. If all such individuals are parties to the Proceeding, the
amount or amounts to be deposited in the trust shall be determined by
independent legal counsel. The terms of the trust shall provide that upon
a Change in Control (i) the trust shall not be revoked or the principal
thereof invaded, without the written consent of the Indemnitee, (ii) the
trustee shall advance, within two (2) business days of a request by the
Indemnitee, any amount properly payable to Indemnitee under Subsection 4(a)
of this Agreement, (iii) the trust shall continue to be funded by the
Corporation in accordance with the funding obligation set forth above, (iv)
the trustee shall promptly pay to the Indemnitee all amounts for which the
Indemnitee shall be entitled to indemnification pursuant to this Agreement
or otherwise, and (v) all unexpended funds in such trust shall revert to
the Corporation upon a final determination by a court of competent
jurisdiction that the Indemnitee has been fully indemnified under the terms
of this Agreement. The trustee shall be chosen by the Indemnitee and shall
be a national or state bank having a combined capital and surplus of not
less than $50,000,000. Nothing in this Section shall relieve the
Corporation of any of its obligations under this Agreement. At the time of
each draw from the trust fund, the Indemnitee shall provide the trustee
with a written request providing that Indemnitee undertakes to repay such
amount to the extent that it is ultimately determined that Indemnitee is
not entitled to such indemnification. Any funds, including interest or
investment earnings thereon, remaining in the trust fund shall revert and
be paid to the Corporation if (i) a Change in Control has not occurred, and
(ii) if the executive committee of the Board of Directors or the Chairman
or Chief Executive Officer of the Corporation determines that the
circumstances giving rise to that particular funding of the trust no longer
exists.
For purposes of this Section and Section 7 hereof, a "Change in
Control" shall mean a change in control of a nature that would be required
to be reported in response to Item 5(f) of Schedule 14A of Regulation 14a
promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), provided that, without limitation, such a change in
control shall be deemed to have occurred if (i) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Corporation and any new Director
whose election by the Board of Directors or nomination for election by the
Corporation's stockholders was approved by a vote of at least two-thirds
(2/3) of the Directors then still in office who either were Directors at
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the beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a majority
thereof, or (ii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 80% of the total voting power
represented by the voting securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation, or (iii)
the stockholders of the Corporation approve a plan of complete liquidation
of the Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's assets.
For purpose of this Section, a "Potential Change in Control" shall be
deemed to have occurred if (i) the Corporation enters into an agreement,
the consummation of which would result in the occurrence of a Change in
Control, or (ii) any person (including the Corporation) publicly announces
an intention to take or to consider taking actions which once consummated
would constitute a Change in Control, or (iii) the Board of Directors
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
SECTION 6. PARTIAL INDEMNIFICATION; SUCCESSFUL DEFENSE. If
Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the Expenses or
Resolution Costs actually and reasonably incurred by Indemnitee but not,
however, for the total amount thereof, the Corporation shall nevertheless
indemnify Indemnitee for the portion of such Expenses or Resolution Costs
to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all claims
relating in whole or in part to a Proceeding or in defense of any issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection therewith.
SECTION 7. Unless and until a Change in Control has occurred, the
Corporation shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding made without
the Corporation's written consent. The Corporation shall not settle any
Proceeding in any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent. Neither the Corporation
nor the Indemnitee will unreasonably withhold their consent to any proposed
settlement.
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SECTION 8. SEVERABILITY. If this Agreement or any portion thereof
(including any provision within a single section, subsection or sentence)
shall be held to be invalid, void or otherwise unenforceable on any ground
by any court of competent jurisdiction, the Corporation shall nevertheless
indemnify Indemnitee as to any Expenses or Resolution Costs with respect to
any Proceeding to the full extent permitted by law or any applicable
portion of this Agreement that shall not have been invalidated, declared
void or otherwise held to be unenforceable.
SECTION 9. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The
indemnification provided by this Agreement shall be in addition to any
other rights to which Indemnitee may be entitled under the Articles of
Incorporation, the Bylaws, any agreement, any vote of stockholders or
disinterested Directors, the Business Corporation Act of the State of
Michigan, or otherwise, both as to actions in Indemnitee's official
capacity and as to actions in another capacity while holding such office.
SECTION 10. NO PRESUMPTION. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, 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 Indemnitee did not meet any particular standard of conduct
or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
SECTION 11. 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 everything that may be necessary to
secure such rights, including the execution of such documents necessary to
enable the Corporation to effectively bring suit to enforce such rights.
SECTION 12. NO DUPLICATION OF PAYMENTS. The Company shall not be
liable under this Agreement to make any payment to the extent Indemnitee
has otherwise actually received payment (under any insurance policy, Bylaw
or otherwise) of the amounts otherwise indemnifiable hereunder.
SECTION 13. NOTICE. Indemnitee shall, as a condition precedent to
his right to be indemnified under this Agreement, give to the Corporation
notice in writing as soon as practicable of any claim for which indemnity
will or could be sought under this Agreement. Notice to the Corporation
shall be directed to Manatron, Inc., 0000 Xxxxx 0xx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Secretary (or such other address as the
Corporation shall designate in writing to Indemnitee). Notice shall be
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deemed received three (3) days after the date postmarked if sent by prepaid
mail properly addressed. In addition, Indemnitee shall give the
Corporation such information and cooperation as it may reasonably require
and shall be within Indemnitee's power to give.
SECTION 14. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall constitute the original.
SECTION 15. CONTINUATION OF INDEMNIFICATION. The indemnification
rights provided to Indemnitee under this Agreement, including the right
provided under Subsection 4(a) above, shall continue after Indemnitee has
ceased to be a Director, Officer, employee, agent or fiduciary of the
Corporation or any other corporation, partnership, joint venture, trust or
other enterprise in which Indemnitee served in any such capacity at the
request of the Corporation.
SECTION 16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of 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 the Corporation, spouses, heirs, and personal
and legal representatives.
SECTION 17. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan applicable
to contracts made and to be performed in such state without giving effects
to the principles of conflicts of laws.
SECTION 18. LIABILITY INSURANCE. To the extent the Company maintains
an insurance policy or policies providing Directors' and Officers'
liability insurance, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of
the coverage available for any corporation, Officer, employee, agent or
fiduciary.
SECTION 19. PERIOD OF LIMITATIONS. No legal action shall be brought
and no cause of action shall be asserted by or on behalf of the Corporation
or any affiliate of the Corporation against Indemnitee, Indemnitee's
spouse, heirs, executors or personal or legal representatives after the
expiration of two (2) years from the date of accrual of such cause of
action, and any claim or cause of action of the Corporation or its
affiliate shall be extinguished and deemed released unless asserted by the
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timely filing of a legal action within such two (2) year period; provided,
however, that if any shorter period of limitations is otherwise applicable
to any such cause of action such shorter period shall govern.
SECTION 20. AMENDMENTS, ETC. 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.
ATTEST: MANATRON, INC.
_____________________________ ___________________________________
Xxxx X. Xxx Xxxxxxx X. Xxxx
Secretary Chairman of the Board
___________________________________
Xxxx X. Xxxxxxxxx
President and
Chief Executive Officer
INDEMNITEE:
___________________________________
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