FORM OF
INDEMNIFICATION AGREEMENT
Date: _____________
PARTIES AND ADDRESSES:
LSC, Incorporated (the "Company")
0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000-0000
------------------------ (the "Indemnitee")
------------------
------------------
------------------
RECITALS:
A. The Company is concerned with the retention of qualified, competent
persons to serve as directors and officers of the Company.
B. Indemnitee is a member of the Company's Board of Directors and or an
officer of the Company.
C. The Company, a Minnesota corporation, desires that Indemnitee
continue to serve the Company in the capacity described above.
D. Indemnitee is willing to continue serving the Company in the
capacity described above, subject to the provisions of this Agreement.
AGREEMENT:
In consideration of the mutual promises contained herein, and for other good and
valuable consideration, the parties agree as follows:
1. INDEMNIFICATION; ADVANCE OF EXPENSES. The Company agrees to indemnify and
hold Indemnitee harmless from and against any claims, liabilities, damages or
expenses incurred by Indemnitee in or arising out of the status, capacities and
activities of Indemnitee with respect to the Company to the maximum extent
permitted under Minnesota Statutes Section 302A.521, in accordance with the
terms, conditions and procedures set forth in this Agreement and Minnesota
Statutes Section 302A.521. The Company shall advance expenses to Indemnitee to
the maximum extent permitted under Minnesota Statutes Section 302A.521, in
accordance with the terms, conditions and procedures set forth in this
Agreement and Minnesota Statutes Section 302A.521.
2. INSURANCE.
(a) The Company agrees to purchase and maintain, for the benefit and on
behalf of Indemnitee, directors' and officers' liability insurance
covering those claims and liabilities, with respect to which insurance
is reasonably available on a cost effective basis, which may be
asserted against, or incurred by, Indemnitee in or arising out of the
status, capacities and activities of Indemnitee as a director and/or
officer of the Company. This obligation to purchase insurance shall be
in addition to the obligation of the Company to indemnify Indemnitee
under Section 1. The decision as to whether insurance is "reasonably
available on a cost effective basis" may be made by the Company's Board
of Directors by majority vote of the directors present at any meeting
at which a quorum is present.
(b) In the event the Company is unable to, or for any reason does not
in fact, acquire and maintain in effect the insurance required by
Section 2(a), the Company agrees, in addition to its obligations under
Section 1, to indemnify Indemnitee to the full extent of the coverage
which would otherwise have been provided for the benefit of Indemnitee
pursuant to the policy or policies of insurance provided for in Section
2(a).
3. NOTIFICATION AND DEFENSE OF CLAIM.
(a) Promptly after receipt by Indemnitee, or the Company, of any notice
or document respecting the commencement of any action, suit, proceeding
or investigation naming or involving Indemnitee and relating to any
matter concerning which Indemnitee may be entitled to indemnification
or advancement of expenses pursuant to this Agreement, the party
receiving same will notify the other of the receipt of same, but the
omission on the part of Indemnitee to so notify the Company will not
relieve the Company from any obligation or liability which it may have
to Indemnitee under this Agreement or otherwise.
(b) With respect to any action, suit or proceeding:
(i) The Company will be entitled to participate therein at
the Company's own expense.
(ii) Except as otherwise provided below, to the extent that
the Company may deem desirable, the Company, individually, or
jointly with any other indemnifying party, will be entitled to
assume the defense thereof, with counsel satisfactory to
Indemnitee. After notice from the Company to Indemnitee of the
Company's election to assume the defense thereof, the Company
will not be liable to Indemnitee under this Agreement for any
legal fees or other expenses subsequently incurred by
Indemnitee in connection with the defense thereof, unless
otherwise consented to by the Company (which consent shall not
be unreasonably withheld), other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall
have the right to employ counsel in such action, suit or
proceeding but the fees and expenses of such counsel incurred
after notice from the Company of its assumption of the defense
thereof shall be at the expense of Indemnitee unless:
I. The employment of counsel by Indemnitee has been
authorized by the Company, or
2
II. 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 action, or
III. The Company shall not in fact have employed
counsel to assume the defense of such action,
in each of which cases the fees and expenses of Indemnitee's
counsel shall be at the expense of the Company.
Notwithstanding the other provisions of this Section 3(b), the
Company shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of the
Company or as to which Indemnitee shall have made the
conclusion provided for in (II) above.
(iii) The Company shall not be liable to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any
action or claim effected without the Company's written
consent. The Company shall not settle any action or claim in
any manner which would impose any penalty or limitation on
Indemnitee without Indemnitee's written consent. Neither the
Company nor Indemnitee will unreasonably withhold their
consent to any proposed settlement.
4. REPAYMENT OF EXPENSES. Indemnitee agrees that Indemnitee will reimburse the
Company for all expenses advanced to Indemnitee or paid by the Company on behalf
of Indemnitee pursuant to the Company's obligations under Section 1 in the event
that the criteria for indemnification as set forth in Minnesota Statutes Section
302A.521 have not been satisfied.
5. ABSOLUTE RIGHT TO INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The Company
agrees that it shall not, and the Company hereby waives all rights that it has
or may have to, refuse to indemnify or advance expenses based on any breach or
alleged breach of any of the provisions of this Agreement by Indemnitee, or for
any other reason whatsoever.
6. AMENDMENTS TO MINNESOTA STATUTES, OR COMPANY'S ARTICLES OF INCORPORATION OR
BYLAWS. The Company represents that its Articles of Incorporation and Bylaws
provide for indemnification of Indemnitee to the maximum extent permitted by
Minnesota Statutes Section 302A.521 as of the date of this Agreement, and to the
maximum extent required by this Agreement. Any amendments to the Articles of
Incorporation or Bylaws of the Company which reduce or eliminate indemnification
rights of persons entitled to indemnification under its Articles of
Incorporation or Bylaws shall have no effect with respect to this Agreement, and
Indemnitee shall continue to have all rights, entitlements and benefits
hereunder. If the Minnesota Statutes (or other applicable law) or the Articles
of Incorporation or Bylaws of the Company are amended so as to provide for
greater indemnification rights or benefits, this Agreement shall be deemed
amended to provide for such greater indemnification rights or benefits and
Indemnitee shall be entitled to such greater rights and benefits to the maximum
extent available to any then currently serving director or officer, as the case
may be, of the Company. To the extent that the Minnesota Statutes, or other
applicable law, limit in any manner the rights and benefits available to
Indemnitee under this Agreement, this Agreement shall be interpreted as
providing indemnification to Indemnitee to the fullest extent permitted by
applicable law.
3
7. OTHER RIGHTS OF INDEMNITEE. The rights of Indemnitee to indemnification and
advancement of expenses pursuant to this Agreement shall not be exclusive of
other rights Indemnitee may have (i) under applicable law, (ii) pursuant to
other agreements between the Company and Indemnitee or the Company's Articles of
Incorporation or Bylaws, (iii) pursuant to a vote of disinterested directors of
the Company or (iv) pursuant to a vote of shareholders of the Company.
8. AMENDMENT. This Agreement may be amended at any time by written instrument
executed by the Company and Indemnitee.
9. ENFORCEMENT OF AGREEMENT BY INDEMNITEE.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumes the obligations imposed on the Company
hereby in order to induce Indemnitee to continue as a director and/or
officer of the Company, and acknowledges that Indemnitee is relying
upon this Agreement in continuing in such capacity or capacities.
(b) In the event Indemnitee is required to bring any action to enforce
Indemnitee's rights or to collect monies due Indemnitee under this
Agreement, and is successful in such action, the Company shall
reimburse Indemnitee for all of Indemnitee's fees and expenses in
bringing and pursuing such action.
10. NOTICES. All notices and other communications between the parties with
respect to this Agreement must be in writing and shall be deemed to have been
duly delivered as of the date on which they are hand delivered or deposited in
the United States mail for delivery by registered or certified mail, postage and
fees prepaid, addressed as first above written. Addresses may be changed by
notice in writing signed by a party desiring to change such party's address, but
any such notice of change of address shall not be effective until actually
received by the other party.
11. AGREEMENT CONTROLLING. Except as otherwise specified herein, this Agreement
supersedes all other agreements and understandings between the parties with
respect to the subject matter hereof to the extent such other agreements and
understandings are inconsistent with the provisions of this Agreement.
12. SEVERABILITY OF PROVISIONS. The provisions of this Agreement are severable
and, in the event any portion of this Agreement is declared illegal or
unenforceable for any reason whatever, the remainder of this Agreement shall be
effective and binding upon the parties hereto to the fullest extent permissible
by law. Without limiting the generality of the foregoing sentence, it is
expressly understood that the intent of this Agreement is to provide for
indemnification of Indemnitee to the maximum extent permitted by law and, as
such, in no event shall the illegality or unenforceability of any provision of
this Agreement be construed or interpreted so as to deny indemnification of
Indemnitee to the maximum extent permitted by law.
13. BINDING EFFECT. Due to the personal nature of the services to be rendered by
Indemnitee, Indemnitee may not assign this Agreement. Subject to the foregoing,
the provisions of this Agreement are binding upon and inure to the benefit of
(i) Indemnitee and Indemnitee's respective heirs, legal representatives and
administrators, and (ii) the Company and the Company's successors, transferees
and assigns.
4
14. SURVIVAL. The obligations of the Company to Indemnitee with respect to the
indemnification and advancement of expenses as provided in this Agreement shall
survive and continue after Indemnitee has ceased to be a director and/or
officer, as the case may be, of the Company and after this Agreement has
terminated, and shall inure to the benefit of Indemnitee and Indemnitee's heirs,
legal representatives and administrators.
15. ARBITRATION. Any dispute arising out of or relating to this Agreement or an
actual or alleged breach of this Agreement shall be discussed between the
parties in a good faith effort to arrive at a mutual settlement of any such
controversy. If, notwithstanding the parties' good faith efforts, a dispute
remains unresolved for a period of 45 days after initial notice from one party
to the other of the dispute, the parties shall submit such dispute to
arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award may be entered in any court having
jurisdiction over the controversy. The costs of the proceedings shall be paid by
the Company. Unless otherwise agreed upon, the place of the arbitration
proceedings shall be Hennepin County, Minnesota.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota, without regard to the laws
of conflict of any jurisdiction.
17. NO EMPLOYMENT AGREEMENT. This Agreement shall not be construed or
interpreted to create an employment agreement between the Company and
Indemnitee.
18. TERM. The term of this Agreement shall be coextensive with Indemnitee's
service as a director and/or officer, as the case may be, of the Company;
provided, however, it is expressly understood that Section 14 shall survive the
termination of this Agreement.
(BALANCE OF PAGE INTENTIONALLY BLANK)
5
IN WITNESS WHEREOF, the parties have executed this Agreement in the manner
appropriate for each as of the day and year above written.
LSC, INCORPORATED
By
------------------------------------
Its
------------------------------
INDEMNITEE
---------------------------------------
[Signature]
6
