INDEMNIFICATION AGREEMENT
Exhibit
10.26
THIS
AGREEMENT (the “Agreement”) is made on this ___ day of May, 2009 between
Prestige Brands Holdings, Inc., a Delaware corporation (the “Company”), and [Name] (“Indemnitee”):
W I T N E
S S E T H:
WHEREAS, Indemnitee is an
officer the Company and in such capacity performs a valuable service for the
Company; and
WHEREAS, the Company’s
certificate of incorporation authorizes the Company to indemnify its officers
and directors to the fullest extent authorized by the Delaware General
Corporation Law (the “Statute”);
and
WHEREAS, the Statute
specifically provides that the indemnification provided thereunder is not
exclusive of any other rights in respect to indemnification to which those
seeking indemnification may be entitled; and
WHEREAS, the Statute
contemplates that agreements may be entered into between the Company and each of
its officers with respect to indemnification; and
WHEREAS, in order to enhance
Indemnitee’s continued and effective service to the Company, and in order to
induce Indemnitee to provide continued services to the Company as an officer,
the Company wishes to enter into this Agreement relating to the indemnification
of, and the advancement of expenses to, Indemnitee as well as to provide
coverage to Indemnitee under the Company’s directors’ and officers’ liability
insurance policies (the “D&O
Insurance”).
NOW, THEREFORE, in
consideration of Indemnitee’s continued service as an officer of the Company,
the parties hereby, agree as follows:
1. DEFINITIONS. In
addition to other terms defined and used in this Agreement, the following
capitalized terms when used in this Agreement shall have the following
meanings:
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(a)
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“Affiliate” of
any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control
with such specified Person. For the purposes of this
definition, “control,” when used with respect to any specified Person,
means the power to direct the management and policies of such Person,
directly or indirectly, whether through ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the
foregoing.
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(b)
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“Associate”
shall have the meaning ascribed to such term in Exchange Act Rule
12b-2.
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(c)
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“Beneficial
Owner” shall have the meaning ascribed to such term, and be
determined in the manner set forth, in Exchange Act Rule
13d-3.
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(d)
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“Board” means
the Board of Directors of the
Company.
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(e)
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“Change in
Control” means the earliest of the following to
occur:
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(1)
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the
public announcement by the Company or by any Person (which shall not
include the Company, any Subsidiary or any employee benefit plan of the
Company or of any Subsidiary) (the “Announcing Person”) that the
Announcing Person, together with the Acquiring Person’s Affiliates and
Associates, is the Beneficial Owner of fifteen percent (15%) or more of
the then outstanding Voting
Securities;
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(2)
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the
commencement of, or after the first public announcement of any Announcing
Person of an intention to commence, a tender or exchange offer, the
consummation of which would result in any Announcing Person becoming the
Beneficial Owner of thirty percent (30%) or more of the then outstanding
Voting Securities;
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(3)
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the
announcement of any transaction relating to the Company that would be
required to be described pursuant to the requirements of Item 5.01 of a
Current Report on Form 8-K under the Exchange
Act;
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(4)
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a
proposed change in the membership of the Board such that, during any
period of twenty-four (24) consecutive months, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election or nomination
for election by the shareholders of the Company of each new Director was
approved by a vote of at least two-thirds (2/3) of the Directors then
still in office who were members of the Board at the beginning of the
twenty-four (24) month period;
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(5)
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the
Company enters into an agreement of merger, consolidation, share exchange
or similar transaction with any other Person other than a transaction
which could result in the Voting Securities outstanding immediately prior
to the consummation of such transaction continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving Person) at least two-thirds of the combined voting power of the
Company’s or such surviving Person’s outstanding voting stock immediately
after such transaction;
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(6)
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the
Board approves a plan of liquidation or dissolution of the Company or an
agreement for the sale or disposition by the Company (in one transaction
or a series of transactions) of all or substantially all of the Company’s
assets to a Person that is not an Affiliate of the Company;
or
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(7)
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any
other event which shall be deemed by a majority of the Board to constitute
a “Change in Control.”
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(f)
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“Corporate
Status” describes the status of an individual who is or was a
Director (including corresponding service as an Officer) or an Officer of
the Company or a director, officer, partner, trustee, employee or agent of
any other Person at the request of the Company. For the
purposes of this Agreement, if an Indemnitee serves as a director of a
subsidiary, whether or not wholly-owned, of the Company, he does so at the
request of the Company.
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(g)
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“Company” has
the meaning ascribed to such term in the preamble and also includes,
without limitation, any Entity that is the successor entity to the Company
by merger, combination, consolidation, or other transaction in which the
separate existence of the Company
ceases.
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(h)
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“D&O
Insurance” means the directors’ and officers’ liability insurance
issued by the insurers, and having the policy numbers, amounts and
deductibles set forth in Section 5.1 and any replacement or substitute
policy or policies issued by one or more reputable insurers, providing, in
the aggregate, at all times and in all respects, coverage at least
comparable and in the same amount as that provided under the policies
identified in Section 5.1.
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(i)
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“Director” means
an individual who is or was a member of the Board and includes, unless the
context requires otherwise, the estate or personal representative of a
Director.
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(j)
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“Disinterested
Director” means a Director, who at the time of any vote referred to
in Section 8.2, Section 8.3 or Section 9, is
not:
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(1)
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A
party to the Proceeding giving rise to the subject matter of the decision
being made; or
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(k)
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“Entity” means a
corporation (including any Subsidiary), partnership, limited liability
company, joint venture, joint-stock corporation, trust, employee benefit
plan, association, foundation, organization, or other enterprise or legal
entity, unincorporated organization or government (or any subdivision,
department, commission or agency
thereof).
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(l)
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“Exchange Act”
means the Securities Exchange Act of 1934, as
amended.
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(m)
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“Expenses”
includes, without limitation, attorneys’ fees and retainers, court costs,
transcript costs, fees of experts and vendors (e.g., electronically stored
information providers), travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and other
disbursements or expenses of the
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| types customarily incurred in connection with a Proceeding that are actually and reasonably incurred by Indemnitee: |
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(1)
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by
reason of his being a Party or in connection with the defense or
settlement of a Proceeding;
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(2)
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in
connection with a Proceeding for which Indemnitee is requested or
subpoenaed to appear as a witness;
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(3)
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enforcing
his rights under this Agreement or any other agreement or under applicable
law, the certificate of incorporation or the bylaws of the Company or any
applicable Subsidiary now or hereafter in effect relating to
indemnification for Proceedings and including, without limitation, claims
for payment of Interim Expenses or for establishing a right to
indemnification pursuant to Section 8.6;
or
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(4)
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in
connection with his pursuing a recovery under the D&O
Insurance.
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(n)
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“Interim
Expenses” means Expenses incurred by Indemnitee in connection with
any Proceeding in advance of the final disposition of the
Proceeding.
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(o)
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“Loss” and
“Losses”
means any amount which Indemnitee incurs or becomes obligated to pay as a
result of any Proceeding, including, without
limitation:
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(1)
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all
judgments, penalties and fines, and amounts paid or to be paid in
settlement;
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(2)
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all
interest, assessments and other charges paid or payable in connection
therewith; and
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(3)
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any
federal, state, local or foreign taxes imposed (net of the value to
Indemnitee of any tax benefits resulting from tax deductions or otherwise
as a result of the actual or deemed receipt of any payments under this
Agreement).
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(p)
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“Officer” means
an individual who is or was an officer of the Company and/or any
Subsidiary. “Officer” includes, unless the context requires otherwise, the
estate or personal representative of an
officer.
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(q)
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“Party” includes
an individual who was, is, or is threatened to be made, a named defendant
or respondent in a Proceeding by reason of such individual’s Corporate
Status or, in the case of a Spouse, that person’s status as a spouse of an
Indemnitee.
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(r)
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“Person” means
any individual or Entity.
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(s)
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“Proceeding”
means any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, arbitrative, or investigative,
whether formal or informal, any appeal in such an action, suit, or
proceeding, and
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| any inquiry or investigation that could lead to such an action, suit, or proceeding, whether formal or informal including, without limitation, any Proceeding that in any way arises out of or is related to Indemnitee’s Corporate Status or, in the case of a Spouse, seeks damages recoverable from marital community property, jointly-owned property or property purported to have been transferred from Indemnitee to a Spouse. |
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(t)
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“Special Legal
Counsel” means a law firm or an attorney
that:
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(1)
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neither
is nor in the past five years has been retained to represent in any
material matter the Company, any Subsidiary, Indemnitee, any other party
to the Proceeding, or any of their respective Affiliates or
Associates;
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(2)
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under
applicable standards of professional conduct then prevailing would not
have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee’s rights to
indemnification under this Agreement;
and
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(3)
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is
reasonably acceptable to the Company and
Indemnitee.
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(u)
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“Spouse” means
any person to whom Indemnitee is legally married at any time Indemnitee is
covered under the indemnification provided in this Agreement and includes
a person to whom an Indemnitee did not remain married during the entire
period of such coverage.
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(v)
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“Subsidiary” of
a Person means any Entity at least fifty percent (50%) of the ownership
interests having ordinary voting power of which shall at the time be owned
or controlled, directly or indirectly, by such Person or by one or more of
its Subsidiaries or by such Person and one or more of its
Subsidiaries. Unless otherwise expressly provided, all
references in this Agreement to a “Subsidiary” shall mean a Subsidiary of
the Company.
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(w)
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“Trust” and
“Trustee”
shall have the respective meanings set forth in Section
9.
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(x)
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“Voting
Securities” means any securities of the Company that vote generally
in the election of Directors.
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2. INDEMNIFICATION. Subject
to the exclusions specified in Section 3 and to the procedure set forth in
Sections 8.1 through 8.6 (and in addition to the obligation under Sections 7.1
and 7.2 to pay Interim Expenses), the Company shall indemnify and hold harmless
Indemnitee against:
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(a)
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any
Expenses; and
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(b)
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any
Losses.
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Notwithstanding
any other provision of this Agreement or otherwise, to the extent that
Indemnitee is a party to (or a participant in) and is successful, on the merits
or otherwise, in the defense of any
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Proceeding
or any claim, issue or matter therein, the Company shall indemnify Indemnitee
against all Expenses and Losses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is entitled under
any provision of this Agreement to indemnification for some or a portion of any
Expense or Loss, but not, however, for the total amount thereof, the Company
nevertheless shall indemnify Indemnitee for the portion thereof to which he is
entitled. For purposes of this Section 2 and without
limitation:
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(a)
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the
termination of any Proceeding or any claim, issue or matter in a
Proceeding by dismissal, with or without prejudice, shall be deemed to be
a successful result as to such Proceeding, claim, issue or
matter;
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(b)
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the
termination of a proceeding by a judgment, order, settlement, conviction
or upon a plea of nolo contendere or its equivalent is not, of itself,
determinative that the Indemnitee did not act in good faith, did not meet
a particular standard of conduct, did not have any particular belief, or
that a court has determined that indemnification is not permitted by
applicable law;
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(c)
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for
purposes of any determination of good faith, the Indemnitee shall be
presumed to have acted in good faith, if he relied on information,
opinions, reports or statements, including financial statements or other
financial data prepared or presented by one or more officers or employees
of the Company whom the Indemnitee reasonably believed to be reliable and
competent in the matters presented or by legal counsel, public accountants
or other persons as to matters the Indemnitee reasonably believed were
within the person’s professional or expert competence; provided, however,
the Indemnitee shall not be presumed to be acting in good faith, if he has
actual knowledge concerning the matter in question that makes such
reliance unwarranted; and
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(d)
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the
Officer shall be presumed to be entitled to indemnification, subject to
the Company’s ability to rebut such
presumption.
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3. EXCLUSIONS. The
Company shall not be obligated to indemnify Indemnitee for Expenses or Losses
under either Section 2(a) or 2(b):
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(a)
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to
the extent such indemnification would reduce or eliminate any payments to
or on behalf of Indemnitee under any D&O Insurance covering
Indemnitee;
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(b)
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to
the extent of any Expenses or Losses for which Officer is indemnified
pursuant to the certificate of incorporation or bylaws of the Company or
any D&O Insurance carried by the
Company;
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(c)
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on
account of any claim against Indemnitee arising out of the trading of the
Company’s securities while possessing material non-public information or
for profits arising from the purchase and sale by Indemnitee of securities
in accordance with the provisions of § 16(b) of the Exchange Act or any
similar provisions of any federal or state statutory
law;
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(d)
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if
a final judgment or other final adjudication by a court having
jurisdiction in the matter shall determine that such indemnity is not
lawful;
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(e)
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in
respect of any Proceeding initiated by Indemnitee against the Company, any
Subsidiary or any Director or Officer
unless
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(1)
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the
Company has joined in or consented to the initiation of such Proceeding;
or
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(2)
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the
Proceeding is for recovery of Expenses described in Section 1(m)(3) or
Section 1(m)(4);
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(f)
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for
any amounts paid in settlement of any Proceeding without the Company’s
prior written consent, which consent shall not be unreasonably withheld or
delayed;
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(g)
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in
connection with any Proceeding if it has been finally adjudicated by a
court of competent jurisdiction that, in connection with the subject of
the Proceeding out of which the claim for indemnification has arisen,
Indemnitee:
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(1)
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did
not act in good faith and in a manner believed by him to be in or not
opposed to the best interests of the Company;
and
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(2)
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in
the case of any criminal Proceeding, failed to have reasonable cause to
believe that his conduct was not unlawful;
or
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(h)
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in
connection with any Proceeding if it has been finally adjudicated by a
court of competent jurisdiction that, in connection with the subject of
the Proceeding out of which the claim for indemnification has arisen,
Indemnitee is liable to the Company including, without limitation, a claim
that Indemnitee received an improper personal benefit, unless the court of
law or another 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 Expenses or Losses which such court shall
deem proper.
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4. EFFECT OF CERTAIN
RESOLUTIONS. Neither the settlement or termination of any
Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to indemnification hereunder. To the
maximum extent permitted by applicable law in making a determination with
respect to entitlement to indemnification under this Agreement, it shall be
presumed that Indemnitee is entitled to indemnification or payment under this
Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 8.1; and the Company shall have the burden of proof to
overcome that presumption in connection with the making of any determination
pursuant to either of Sections 8.2 or 8.3 that is contrary to that
presumption. In addition, 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 affect adversely either the right of Indemnitee to
indemnification under this Agreement or the presumptions to which Indemnitee is
otherwise entitled pursuant to the provisions
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of this
Agreement nor create a presumption that Indemnitee did not meet any particular
standard of conduct or have a particular belief or that a court has determined
that indemnification is not permitted by applicable law. If
Indemnitee is serving an employee benefit plan at the request of the Company or
a Subsidiary, Indemnitee’s conduct with respect to the plan for a purpose he
reasonably believed to be in the best interests of the participants in, and the
beneficiaries of, the plan shall be deemed to be not opposed to the best
interests of the Company or the Subsidiary.
5.
D&O
INSURANCE.
5.1 The
Company presently has in force and effect policies of D&O Insurance with
such insurance companies, and having the policy numbers, amounts and deductibles
as follows:
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Insurer
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Policy
No.
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Limit
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Retention
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Copies of
such policies are available for inspection by Indemnitee at the Company’s
principal executive offices.
5.2 The
Company covenants and agrees that, subject only to the provisions of Section
5.3, the Company shall maintain D&O Insurance providing, in all respects,
coverage at least comparable and in the same amount as the D&O Insurance
specified in Section 5.1 for so long as Indemnitee shall continue to serve as an
Officer, and thereafter so long as Indemnitee shall be subject to any possible
Proceeding.
5.3 The
Company shall have no obligation under Section 5.2 to maintain D&O Insurance
if a majority of the Company’s independent (non-employee) directors determines
in good faith, as a matter of reasonable business judgment, that such insurance
is not reasonably available, the premium cost for such insurance is
substantially disproportionate to the amount of coverage provided, or the
coverage provided by such insurance is so limited by exclusions as to provide an
insufficient benefit. The Company shall promptly inform Indemnitee in
writing of such determination.
5.4 The
Company’s indemnification obligation to Indemnitee under this Agreement shall
not be affected by any reduction in, or cancellation of, the D&O Insurance
(whether voluntary or involuntary on behalf of the Company).
6.
NOTIFICATION AND DEFENSE OF
CLAIMS.
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6.1 Indemnitee
shall give notice in writing to the Company as soon as practicable after
Indemnitee becomes aware of any Proceeding with respect to which indemnification
will or could be sought under this Agreement; provided that Indemnitee’s failure
to provide prompt notice of such claim for indemnification to the Company shall
not relieve the Company of its indemnification obligations hereunder unless such
delay in notification to the Company has resulted in prejudice to the Company in
the Proceeding; and provided further, that the failure of Indemnitee to give
such notice shall not relieve the Company of any obligations it may have to
Indemnitee otherwise than under this Agreement.
6.2 In the
event any Proceeding is by or in the right of the Company or any Subsidiary,
Indemnitee may, at the option of Indemnitee, either control the defense thereof
or accept the defense provided under the D&O Insurance; provided, however,
that Indemnitee may not control the defense if such decision would affect the
coverage provided by the D&O Insurance, if any, to Indemnitee, the Company,
any Subsidiary or the other Directors and Officers covered
thereby. The Company shall not be entitled to assume the defense of
any Proceeding brought by or in the right of the Company or any
Subsidiary.
6.3 In the
event any Proceeding is other than by or in the right of the Company or any
Subsidiary, the Company shall be entitled to participate therein at its own
expense. Except as otherwise provided below, at the option of the Company, the
Company, alone or jointly with any other notified indemnifying party, shall be
entitled to assume the defense of any such Proceeding of which Indemnitee
notifies the Company, with counsel mutually acceptable to the Company and to
Indemnitee. After notice from the Company to Indemnitee of the
Company’s decision to assume the defense in any Proceeding, the Company shall
not be liable to Indemnitee under this Agreement for any Expenses subsequently
incurred by Indemnitee in connection with the defense of the Proceeding other
than reasonable costs of investigation, travel expenses or as otherwise provided
below. Indemnitee shall have the right to employ counsel in such
Proceeding but the Expenses in connection with employment of such counsel shall
be paid by Indemnitee unless:
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(a)
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the
employment of such counsel by Indemnitee has been authorized by the
Company;
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(b)
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Indemnitee
shall have reasonably concluded that there may be a conflict of interest
between the Company and Indemnitee in the conduct of the defense of such
Proceeding; or
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(c)
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the
Company shall not within sixty (60) days after Indemnitee has provided the
Company notice of a Proceeding in fact have employed counsel to assume the
defense of such Proceeding;
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in each
of which cases the Expenses in connection with such Proceeding shall be paid by
the Company. The Company shall not be entitled to assume the defense
of any Proceeding as to which Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company and Indemnitee in the
course of defense of such Proceeding.
6.4 In no
event shall the Company authorize any settlement imposing any liability or other
obligations on Indemnitee without the express prior written consent of
Indemnitee.
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7.
INTERIM EXPENSES.
7.1 The
Company shall advance Interim Expenses incurred by Indemnitee. By
signing below, Indemnitee hereby undertakes to repay any amounts advanced
pursuant to this Section 7.1 if it is ultimately determined by a court of
competent jurisdiction that Indemnitee is not entitled to indemnification
pursuant to this Agreement. To obtain payment of Interim Expenses
under this Agreement, Indemnitee shall submit to the Company a written request
for payment, together with such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to such advancement. Indemnitee
must also furnish to the Company a written affirmation of his good faith belief
that he has conducted himself in good faith and that he reasonably believed
that:
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(1)
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in
the case of conduct in his Corporate Status, that his conduct was in the
Company’s or such Subsidiary’s best
interests;
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(2)
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in
all other cases, his conduct was at least not opposed to the Company’s or
such Subsidiary’s best interests;
and
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(3)
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in
the case of any criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful.
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7.2 Payment
of Interim Expenses shall be made without regard to Indemnitee’s ability to
repay the advance and without regard to Indemnitee’s ultimate entitlement to
indemnification under the provisions of this Agreement. Indemnitee’s
obligation to repay the Company for advances shall be unsecured and no interest
shall be charged thereon. Requests for payment of Interim Expenses in
accordance with Section 7.1 shall be paid by the Company no later than thirty
(30) days following any such request.
8.
DETERMINATIONS AND PAYMENTS OF
INDEMNIFICATION.
8.1 To obtain
indemnification under Section 2, Indemnitee shall submit to the Company a
written request, together with such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to
indemnification.
8.2 Prior to
the occurrence of any Change in Control, the Person or Persons who shall
determine whether and to what extent Indemnitee is entitled to indemnification
(the “Reviewing Party”) shall be
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(a)
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if
there are two (2) or more Disinterested Directors, the Board, which may
act by a majority vote of all the Disinterested Directors, or by a
majority of the members of a committee composed of two (2) or more
Disinterested Directors appointed by such a vote;
or
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(b)
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Special
Legal Counsel selected either:
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(1)
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if
there are fewer than two (2) Disinterested Directors, by the Board, in
which selection Directors who do not qualify as Disinterested Directors
may participate;
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(2)
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by
a majority vote of Disinterested Directors;
or
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(3)
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by
the shareholders of the Company (if submitted by the Board) but Voting
Securities under the Control of any Indemnitee who is at the time a Party
may not be voted.
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The
Company shall notify Indemnitee in writing no later than two (2) business days
following any determination with respect to the extent of entitlement to
indemnification under this Agreement.
8.3 After the
occurrence of a Change in Control, the Reviewing Party shall be Special Legal
Counsel selected in the manner set forth in Section 8.2(b) and approved by
Indemnitee (which approval shall not be unreasonably withheld). With
respect to all matters arising after a Change in Control concerning the rights
of Indemnitee to indemnification under this Agreement (including the
determinations required in the context of Section 9) or any other agreement or
under applicable law, the certificate of incorporation or the by-laws of the
Company or any applicable Subsidiary now or hereafter in effect relating to
indemnification for Proceedings, the Company shall seek legal advice only from
such Special Legal Counsel. Such Special Legal Counsel, among other
things, shall render its written opinion to the Company and Indemnitee as to
whether and to what extent Indemnitee should be permitted to be indemnified
under applicable law. The Company agrees to pay the reasonable fees
of such Special Legal Counsel and indemnify fully such Special Legal Counsel
against any and all expenses (including attorneys’ fees), claims, liabilities,
loss, and damages arising out of or relating to this Agreement or the engagement
of such Special Legal Counsel pursuant hereto.
8.4 If a
determination is made, in accordance with Section 8.2 or 8.3, that Indemnitee is
entitled to all or a portion of the requested indemnification, payment to
Indemnitee shall be made within thirty (30) days after such
determination.
8.5 In the
event that no determination of entitlement to indemnification shall have been
made within sixty (60) days after Indemnitee has made a request in accordance
with Section 8.1, the Indemnitee shall be deemed entitled to such
indemnification, absent actual fraud in the request for indemnification or a
prohibition of indemnification under applicable law; provided, however, such
sixty-day period may be extended for a reasonable time, not to exceed an
additional thirty (30) days, if the person or persons making the determination
decide in good faith that additional time is required for obtaining or
evaluating documentation or other relevant information.
8.6 In the
event that either:
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(a)
|
payment
of indemnification pursuant to Section 8.4 is not made within thirty (30)
days after a determination has been made that Indemnitee is entitled to
indemnification;
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11
|
(b)
|
payment
of indemnification pursuant to Section 8.5 is not made within thirty (30)
days after Indemnitee is deemed to be entitled to indemnification in
accordance with the provisions
thereof;
|
|
(c)
|
it
is determined pursuant to Section 8.2 or 8.3 that Indemnitee is not
entitled to indemnification under this Agreement or is only entitled to a
portion of such indemnification; or
|
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(d)
|
Indemnitee
has not received advancement of Interim Expenses within thirty (30) days
after making such a request in accordance with Section
7.1;
|
Indemnitee
shall have the right to enforce the indemnification rights under this Agreement
by commencing litigation in any court of competent jurisdiction in the State of
Delaware seeking payment of indemnification or challenging any determination
made in accordance with Section 8.2 or 8.3 or any aspect thereof. Any
determination made in accordance with Section 8.2 or 8.3 not challenged by
Indemnitee on or before the first anniversary of the date of the determination
shall be binding on the Company and Indemnitee. The remedy provided
for in this Section 8.6 shall be in addition to any other remedies available to
Indemnitee in law or equity.
9. ESTABLISHMENT OF
TRUST. After the occurrence of a Change in Control, upon the
request of Indemnitee, the Company shall create a trust (the “Trust”) for the
benefit of Indemnitee and from time to time, when requested by Indemnitee, shall
fund the Trust in an amount sufficient to satisfy any and all Interim Expenses
and Expenses reasonably anticipated to be incurred in connection with
investigating, preparing for, participating in, and/or defending any
Proceeding. The amount or amounts to be deposited in the Trust
pursuant to the foregoing funding obligation shall be determined by Special
Legal Counsel. In making such determination, the Special Legal
Counsel shall consider, among other things, any continuing availability of
D&O Insurance as a source to pay such Interim Expenses and
Expenses. The terms of the Trust shall provide that
|
(a)
|
the
Trust shall not be revoked or the principal thereof invaded, without the
written consent of Indemnitee;
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(b)
|
the
Trustee shall advance, within thirty (30) days of a request by Indemnitee,
any and all Interim Expenses to Indemnitee (and Indemnitee hereby agrees
to repay the Trust under the same circumstances for which Indemnitee would
be required to repay the Company under Section
7.1);
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(c)
|
the
Trust shall continue to be funded by the Company in accordance with the
funding obligation set forth above;
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(d)
|
the
Trustee shall promptly pay to Indemnitee all amounts for which Indemnitee
shall be entitled to indemnification under Section 2 and/or Section 8.3 of
this Agreement; and
|
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(e)
|
all
unexpended funds in the Trust shall revert to the Company upon a final
determination by Special Legal Counsel or a court of competent
jurisdiction, as the case may be, that Indemnitee has been fully
indemnified under the terms of this
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12
| Agreement and that, as a matter of law, no further Proceedings may be instituted against Indemnitee with respect to which Indemnitee may be entitled to indemnification under this Agreement. |
The
trustee (the “Trustee”) shall be a bank or trust company chosen by the Company
and reasonably satisfactory to Indemnitee. Nothing in this Section 9
shall relieve the Company of any of its obligations under this
Agreement. All income earned on the assets in the Trust shall be
reported as income by the Company for federal, state, local, and foreign tax
purposes. The Company shall pay all costs of establishing and
maintaining the Trust and shall indemnify the Trustee against any and all
expenses (including attorneys’ fees), claims, liabilities, loss, and damages
arising out of or relating to this Agreement or the establishment and
maintenance of the Trust.
10. COOPERATION;
SUBROGATION. Indemnitee shall keep the Company generally
informed of, and shall consult with the Company with respect to, the status of
any Proceeding for which Indemnitee is claiming indemnity under this
Agreement. In addition, Indemnitee agrees to give the Company such
information and cooperation as the Company may reasonably require and as shall
be within Indemnitee’s power regarding any Proceeding, which is or may be
subject to this Agreement. In the event of any payment under this
Agreement to or on behalf of Indemnitee, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery in Indemnitee against
any Person other than the Company or Indemnitee in respect of the Proceeding
giving rise to such payment. Indemnitee shall execute all papers
reasonably required and shall do everything reasonably necessary to secure such
rights, including the execution of such documents reasonably necessary to enable
the Company effectively to bring suit to enforce such rights.
11. CONTINUATION OF
INDEMNITY. All agreements and obligations of the Company
contained in this Agreement shall continue during the period Indemnitee is
an Officer and shall continue thereafter, even though Indemnitee may
have terminated his service as an Officer of the Company, so long as Indemnitee
shall be subject to any threatened, pending or completed Proceeding by reason of
Indemnitee’s Corporate Status.
12. RELIANCE. The
Company has entered into this Agreement in order to induce Indemnitee to
continue as an Officer of the Company, and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity.
13. SEVERABILITY. Each
of the provisions of this Agreement is a separate and distinct agreement and
independent of the others, so that if any provision of this Agreement shall be
held to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of this
Agreement’s other provisions. To the extent permitted by law, the
parties waive any provision of law, which renders any such provision prohibited
or unenforceable in any respect.
14. CONTRACT RIGHTS NOT EXCLUSIVE.
The contract rights conferred by this Agreement are in addition to, but not
exclusive of, any other right which Indemnitee may have or may hereafter acquire
under any statute, the certificate of incorporation or the bylaws of the
Company, or any agreement, vote of stockholders or disinterested directors, or
otherwise. The
13
rights
granted in this Agreement supersede any similar right granted under any previous
written agreement between the Company and Indemnitee with respect to the subject
matter of this Agreement.
15. EFFECT OF CHANGES IN LAW OR CORPORATE
DOCUMENTS. No changes in the law and no amendment to the
certificate of incorporation or the bylaws of the Company after the date of this
Agreement shall have the effect of limiting or eliminating the indemnification
available under this Agreement as to any act or omission which has occurred, or
capacity in which Indemnitee served, prior to such amendment. If,
after the date of this Agreement, any change in any applicable law, statute, or
rule expands the power of the Company to indemnify a person based on such
person’s Corporate Status, Indemnitee’s rights and the Company’s obligations
under this Agreement shall be expanded, without any action by Indemnitee or the
Company, to include such change. If any change in any applicable law,
statute, or rule narrows the right of the Company to indemnify a person based on
such person’s Corporate Status, such change, except to the extent otherwise
required by law, shall have no effect on this Agreement or the parties’ rights
or obligations hereunder.
16. SPOUSAL
INDEMNIFICATION. Subject to the same standards, limitations,
obligations and conditions under which indemnification is provided to an
Indemnitee under this Agreement, the Company shall indemnify a Spouse who is or
is threatened to be made a Party to a Proceeding solely by reason of his or her
status as Indemnitee’s spouse. A Spouse also may be entitled to
advancement of Expenses to the same extent that Indemnitee is entitled to
advancement of Expenses herein.
17. SUCCESSORS AND
ASSIGNS. This Agreement shall be binding upon the Company and
its successors and assigns, including, without limitation, any corporation or
other entity which may have acquired all or substantially all of the Company’s
assets or business or into which the Company may be consolidated or merged, and
shall inure to the benefit of Indemnitee and his/her spouse, successors,
assigns, heirs, devisees, executors, administrators or other legal
representatives. The Company shall require any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, by
written agreement in form and substance reasonably satisfactory to the Company
and Indemnitee, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
if no such succession or assignment had taken place.
18. MISCELLANEOUS.
|
(a)
|
This
Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to its conflicts of law
principles thereof.
|
|
(b)
|
As
herein used, the singular number shall include the plural, the plural the
singular, and the use of any gender shall be applicable to all genders,
unless the context would clearly not admit such
construction. Section or paragraph headings are employed herein
solely for convenience of reference, and such headings shall not be used
in construing any term or provision of this Agreement. All references
herein to “section” or “paragraph” shall mean the appropriate numbered
section or paragraph
|
14
| of this Agreement except where reference is particularly made to some other instrument or document. |
|
(c)
|
All
notices and other communications hereunder shall be in writing and shall
be deemed given if delivered personally, effective when delivered, or if
delivered by express delivery service, effective when delivered, or if
delivered via facsimile, effective when such facsimile transmission is
sent (with a confirmed receipt thereof) or if mailed by registered or
certified mail (return receipt requested), effective three (3) business
days after mailing, to the parties at the following addresses (or at such
other address for a party as shall be specified by like
notice):
|
|
|
If
to the Company:
|
|
|
|
| Attn: Chief Executive Officer |
|
|
00
X. Xxxxxxxx
|
|
|
Xxxxxxxxx,
Xxx Xxxx 00000
|
|
|
Facsimile
No.: (000) 000-0000
|
|
|
With
a copy to:
|
|
|
Attn:
General Counsel
|
|
|
00
X. Xxxxxxxx
|
|
|
Xxxxxxxxx,
Xxx Xxxx 00000
|
|
|
Facsimile
No.: (000) 000-0000
|
|
|
If
to Indemnitee:
|
|
|
|
|
|
|
|
|
|
(d)
|
Except
as provided in Section 15 of this Agreement, no amendment, modification or
termination of this Agreement shall be effective unless in writing signed
by both parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement (whether or not similar), nor shall such
waiver constitute a continuing
waiver.
|
|
(e)
|
This
Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument.
|
[Remainder
of page intentionally left blank]
15
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.
| PRESTIGE BRANDS HOLDINGS, INC. | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
| [NAME], [Title] | |||
16
