Exhibit 10.1
INDEMNIFICATION AGREEMENT
XXXXX'X LIQUID GOLD-INC.
This Agreement is made and entered into as of February 24, 2009
between Xxxxx'x Liquid Gold-Inc., a Colorado corporation (the
"Corporation"), and Xxxxx X. Xxxxxxxx of Denver, Colorado ("Officer").
RECITALS:
A. At the request of the Corporation, Officer currently serves as
an executive officer of the Corporation (as defined below). As such,
Officer may be subjected to claims, suits or proceedings.
B. Officer has indicated that it was and is a condition of
Officer's acceptance and continuing in such service that, among other
things, the Corporation agrees to indemnify Officer against liabilities,
expenses and costs incurred in connection with any such claims, suits
or proceedings, in accordance with, and to the fullest extent permitted
by, the Colorado Business Corporation Act; and
C. The Corporation's Articles of Incorporation and the Colorado
Business Corporation Act contemplate that contracts may be made between
the Corporation and officers with respect to indemnification.
AGREEMENT:
Now, therefore, in consideration of Officer's acceptance and
continuation of service as an executive officer after the date of this
Agreement, and in consideration of the mutual covenants stated herein,
the parties agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
following meanings:
(a) Act. The term "Act" means the Colorado Business Corporation
Act as it exists on the date of this Agreement and as it may be hereafter
amended from time to time. In the case of any amendment of the Colorado
Business Corporation Act after the date of this Agreement, when used in
reference to an act or omission occurring prior to effectiveness of such
amendment, the term "Act" shall include such amendment only to the extent
that the amendment permits the Corporation to provide broader
indemnification rights than the Colorado Business Corporation Act
permitted the Corporation to provide at the date of this Agreement and
prior to the amendment.
(b) Officer. As used in reference to a position of Officer, the
term "executive officer" means an executive officer of the Corporation
and, while an executive officer of the Corporation, Officer's serving
at the Corporation's request as a director, officer, agent, associate,
employee, fiduciary, manager, member, partner, promoter, or a trustee
of, or holding a similar position with, any corporation, partnership,
joint venture, trust, other enterprise or person or employee benefit
plan. The term "executive officer" also includes, unless the context
otherwise requires, the estate or personal representative of an
executive officer. The term "executive officer" shall also include
any such broader definition of officer as may be provided in the Act
with amendments after the date of this Agreement.
(c) Proceeding. The term "proceeding" means any threatened,
pending or completed action, suit or proceeding whether civil, criminal,
administrative or investigative, and whether formal or informal.
2. Agreement to Indemnify. The Corporation shall indemnify, and keep
indemnified, Officer in accordance with, and to the fullest extent
permitted and/or required by, the Act from and against any judgments,
penalties, fines (including but not limited to ERISA excise taxes),
amounts paid in settlement and reasonable expenses (including but not
limited to expenses of investigation and preparation and fees and
disbursements of Officer's counsel, accountants or other experts)
actually incurred by Officer in connection with any proceeding in which
Officer was or is made a party or was or is involved (for example, as a
witness) because Officer is or was an executive officer of the
Corporation.
3. Insurance. So long as Officer may be subject to any possible
proceeding by reason of the fact that Officer is or was an executive
officer of the Corporation, to the extent the Corporation maintains an
insurance policy or policies providing directors' and officers'
liability insurance, Officer shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent
of the coverage applicable to any then current executive officer of the
Corporation.
4. Advances. In the event of any proceeding in which Officer is a
party or is involved and which may give rise to a right of
indemnification from the Corporation pursuant to this Agreement,
following written request to the Corporation by Officer, the Corporation
shall pay to Officer, in accordance with and to the fullest extent
permitted and/or required by the Act, amounts to cover reasonable
expenses incurred by Officer in such proceeding in advance of its final
disposition upon receipt of (a) a written affirmation by Officer of
Officer's good faith belief that Officer has met any applicable standard
of conduct;
(b) a written undertaking executed by or on behalf of Officer to repay
the advance if it shall ultimately be determined that Officer did not
meet such standard of conduct; and (c) satisfactory evidence as to
the amount of such expenses.
5. Burden of Proof. If under applicable law, the entitlement of Officer
to be indemnified or advanced expenses hereunder depends upon whether a
standard of conduct has been met, the burden of proof of establishing
that Officer did not act in accordance with such standard shall rest
with the Corporation. Officer shall be presumed to have acted in
accordance with such standard and to be entitled to indemnification or
the advancement of expenses (as the case may be) unless, based upon a
preponderance of the evidence, it shall be determined that Officer has
not met such standard. Such determination and any evaluation as to the
reasonableness of amounts claimed by Officer shall be made by the Board
of Directors of the Corporation or such other body or persons as may be
permitted by the Act. For purposes of this Agreement, unless otherwise
expressly stated, the termination of any 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 Officer 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.
6. Notice to the Corporation. Officer shall notify the Secretary of the
Corporation in writing of any matter for which Officer intends to seek
indemnification hereunder as soon as reasonably practicable following the
receipt by Officer of written notice thereof; provided, however, that
delay in so notifying the Corporation shall not constitute a waiver or
release by Officer of rights hereunder.
7. Counsel for Proceeding. In the event of any proceeding in which
Officer is a party or is involved and which may give rise to a right of
indemnification hereunder, the Corporation shall have the right to retain
counsel reasonably satisfactory to Officer to represent Officer and any
others the Corporation may designate in such proceeding. In any such
proceeding, Officer shall have the right to retain Officer's own counsel,
but the fees and expenses of such counsel shall be at the expense of
Officer unless (a) the retention of such counsel has been specifically
authorized by the Corporation; (b) representation of Officer and another
party by the same counsel would be inappropriate, in the reasonable
judgment of Officer, due to actual or potential differing interests
between them (as might be the case for representation of both the
Corporation and Officer in a proceeding by or in the right of the
Corporation); (c) the counsel retained by the Corporation and
satisfactory to Officer has advised Officer, in writing, that such
counsel's representation of Officer would be likely to involve such
counsel in representing differing interests which could adversely
affect either the judgment or loyalty of such counsel to Officer,
whether it be a conflicting, inconsistent, diverse or other interest;
or (d) the Corporation shall fail to retain counsel for Officer in
such proceeding. Notwithstanding the foregoing, if an insurance
carrier has supplied directors' and officers' liability insurance
covering a proceeding and is entitled to retain counsel for the defense
of such proceeding, then the insurance carrier shall retain counsel to
conduct the defense of such proceeding unless Officer and the
Corporation concur in writing that the insurance carrier's doing so is
undesirable. The Corporation shall not be liable under this Agreement
for any settlement of any proceeding effected without its written
consent. The Corporation shall not settle any proceeding in any
manner which would impose any penalty or limitation on Officer without
Officer's written consent. Consent to a proposed settlement of any
proceeding shall not be unreasonably withheld by either the Corporation
or Officer.
8. Enforcement. The Corporation acknowledges that Officer is relying
upon this Agreement in serving as an executive officer of the
Corporation. If a claim for indemnification or advancement of expenses
is not paid in full by the Corporation within ninety (90) days after a
written claim has been received from Officer by the Corporation, Officer
may at any time bring suit against the Corporation to recover the unpaid
amount of the claim. If successful in whole or in part in such suit,
Officer shall also be entitled to be paid all reasonable fees and
expenses (including without limitation fees of counsel) in bringing and
prosecuting such claim. Whether or not Officer has met any applicable
standard of conduct, the Court in such suit may order indemnification
or the advancement of expenses as the Court deems proper (subject to
any express limitation of the Act). Further, the Corporation shall
indemnify Officer from and against any and all expenses (including
attorneys' fees) and, if requested by Officer, shall (within ten
business days of such request) advance such expenses to Officer, which
are incurred by Officer in connection with any claim asserted against
or suit brought by Officer for recovery under any directors' and
officers' liability insurance policies maintained by the Corporation,
regardless of whether Officer is unsuccessful in whole or in part in
such claim or suit.
9. Proceedings by Officer. The Corporation shall indemnify Officer and
advance expenses to Officer in connection with any proceeding (or part
thereof) initiated by Officer only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation.
10. Nonexclusivity. The rights of Officer for indemnification and
advancement of expenses under this Agreement shall not be deemed
exclusive of, or in limitation of, any rights to which Officer may be
entitled under Colorado law, the Corporation's Articles of Incorporation
or Bylaws, vote of stockholders or otherwise.
11. Miscellaneous.
(a) Effectiveness. This Agreement is effective for, and shall
apply to, (i) any claim which is asserted or threatened before, on or
after the date of this Agreement but for which no action, suit or
proceeding has actually been brought prior to the date of this Agreement
and (ii) any action, suit or proceeding which is threatened before, on
or after the date of this Agreement but which is not pending prior to
the date of this Agreement. Thus, this Agreement shall not apply to any
action, suit or proceeding which has actually been brought before the
date of this Agreement. So long as the foregoing standard of
effectiveness has been satisfied, this Agreement shall be effective for
and shall be applied to acts or omissions prior to, on or after the date
of this Agreement.
(b) Survival; Continuation. The rights of Officer hereunder
shall inure to the benefit of the Officer (even after Officer ceases
to be an executive officer), Officer's personal representative, heirs,
executors, administrators and beneficiaries; and this Agreement shall
be binding upon the Corporation, its successors and assigns. The rights
of Officer under this Agreement shall continue so long as Officer may
be subject to any possible proceeding because of the fact that Officer
was an executive officer of the Corporation. If the Corporation sells,
leases, exchanges or otherwise disposes of, in a single transaction or
series of related transactions, all or substantially all of its
property and assets, the Corporation shall, as a condition precedent
to such transaction, cause effective provision to be made so that the
person or entity acquiring such property and assets shall become bound
by and replace the Corporation under this Agreement.
(c) Governing Law. This Agreement shall be governed by the laws
of the State of Colorado.
(d) Severability. If any provision of this Agreement shall be
held to be prohibited by or invalid under applicable law, such provision
shall be deemed amended to accomplish the objectives of the provision
as originally written to the fullest extent permitted by law and all
other provisions shall remain in full force and effect.
(e) Amendment. No amendment, termination or cancellation of this
Agreement shall be effective unless in writing signed by the
Corporation and Officer.
(f) Other Payments. The Corporation shall not be liable under
this Agreement to make any payment in connection with any proceeding
against or involving Officer to the extent Officer has otherwise
actually received payment (under any insurance policy, Bylaw or
otherwise) of the amounts otherwise indemnifiable hereunder. Officer
shall repay to the Corporation the amount of any payment the
Corporation makes to Officer under this Agreement in connection with any
proceeding against or involving Officer, to the extent Officer has
otherwise actually received payment (under any insurance policy,
Bylaw or otherwise) of such amount.
(g) 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 Officer, who shall execute all papers
required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable
the Corporation effectively to bring suit to enforce such rights.
(h) Headings. The headings in this Agreement are for convenience
only and are not to be considered in construing this Agreement.
(i) Counterparts. This Agreement may be executed in counterparts,
both of which shall be deemed an original, and together shall constitute
one document.
The parties have executed this Agreement as of the day and year
first above stated.
XXXXX'X LIQUID GOLD-INC.
OFFICER
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx, President
/s/ Xxxxx X. Xxxxxxxx
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxx
