INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT ("Agreement")
is made as of the ___ day of _______ 2007, by and between 21st
Century
Holding Company, a Florida corporation (the “Corporation”), and the
___________________ (“Indemnitee”).
WHEREAS,
the
Indemnitee is currently serving as a director and/or executive officer of the
Corporation and the Corporation desires to continue to retain the services
of
the Indemnitee as a director and/or executive officer of the Company;
WHEREAS,
through
its Amended and Restated Articles of Incorporation and Bylaws it is the express
policy of the Corporation to indemnify its executive officers and directors
so
as to provide them with the maximum possible protection permitted by law; and
WHEREAS,
the
Board of Directors has concluded that it is in the best interests of the
Corporation’s shareholders for the Corporation to contractually reaffirm the
Shareholders’ expressed policy to indemnify its executive officers and directors
and to establish procedures and presumptions with respect thereto to make the
process of indemnification more certain; and
WHEREAS,
Florida
Statutes, Section 607.0850, empowers corporations to indemnify, among
others, any person serving as a executive officer and/or director of the
Corporation, and such Section 607.0850 specifies that the indemnification
set forth therein shall not be deemed exclusive of any other rights to which
those seeking indemnification may be entitled under any bylaw, agreement, vote
of shareholders or Disinterested Directors, or otherwise; and
WHEREAS,
the
Corporation desires to have Indemnitee serve or continue to serve as an
executive officer and/or director of the Corporation or of any other
corporation, subsidiary, partnership, joint venture, or trust or other
enterprise of which Indemnitee has been or is serving at the request, or to
represent the interests, of the Corporation (hereinafter referred to as
“Affiliates(s) of the Corporation”) free from undue concern for unpredictable,
inappropriate or unreasonable claims for damages by reason of Indemnitee’s
Corporate Status and Indemnitee desires to serve or to continue to serve
(provided that Indemnitee is furnished the indemnity provided for hereinafter),
in one or more of such capacities;
NOW,
THEREFORE,
in
consideration of the mutual covenants set forth herein, the Corporation and
Indemnitee hereby agrees as follows:
1. Indemnification.
To the
fullest extent permitted by the laws of the State of Florida, the Corporation
shall indemnify and advance Expenses to Indemnitee as provided in this
Agreement. Capitalized terms are defined in Section 12 of this Agreement.
2. Proceedings
Other Than Proceedings by or in the Right of the
Corporation.
Indemnitee shall be entitled to the rights of indemnification, set forth in
Section 1 if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or
is threatened to be, made a party to any threatened, pending, or completed
Proceeding, other than a Proceeding by or in the right of the Corporation.
Indemnitee shall be indemnified against Expenses, liability and loss, including
but not limited to, judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him/her or on Indemnitee’s behalf in connection with
such Proceeding or any claim, issue or matter related thereto, if such
Indemnification is permitted by applicable law and Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in, or not opposed
to, the best interests of the Corporation, and, with respect to any criminal
Proceeding, had no reasonable cause to believe Indemnitee’s conduct was
unlawful.
3. Proceedings
by or in the Right of the Corporation.
Indemnitee shall be entitled to the rights of indemnification set forth in
Section 1 if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or
is threatened to be, made a party to any threatened, pending or completed
Proceeding brought by or in the right of the Corporation to procure a judgment
in its favor provided such Proceeding was authorized by the Board of Directors
of the Corporation. Indemnitee shall be indemnified against Expenses actually
and reasonably incurred by him/her or on Indemnitee’s behalf in connection with
such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Corporation. Notwithstanding the foregoing, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in such
Proceeding as to which Indemnitee shall have been adjudged to be liable, unless
the court in which the Proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication
of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such Expenses which such court shall
deem proper.
4. Indemnification
for Expenses of a Party Who is Wholly or Partly
Successful.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding or any claim, issue
or
matter therein, Indemnitee shall be indemnified against all Expenses actually
incurred by him/her or on Indemnitee’s behalf in connection therewith. If
Indemnitee is not wholly successful in such a Proceeding but is successful,
on
the merits or otherwise, as to one or more but less than all claims, issues
or
matters in such a Proceeding, the Corporation shall indemnify Indemnitee against
all Expenses actually incurred by him/her or on Indemnitee’s behalf in
connection with each successfully resolved claim, issue or matter. For purposes
of this Section 4 and without limitation, the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or matter.
5. Indemnification
for Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any
Proceeding, Indemnitee shall be indemnified against all Expenses incurred by
him/her or on Indemnitee’s behalf in connection therewith.
6. Advancement
of Expenses.
The
Corporation shall pay all Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding within sixty (60) days after the receipt by
the Corporation of a statement or statements from Indemnitee requesting such
payment from time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee and shall include or be preceded or accompanied by an
undertaking by or on behalf of Indemnitee to repay any Expenses if it shall
ultimately be determined that Indemnitee is not entitled to be indemnified
against such Expenses.
7. Procedure
for Determination of Entitlement to Indemnification.
(a) To
obtain
indemnification, Indemnitee shall submit to the Corporation a written request,
accompanied by 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 (hereinafter a “Request for
Indemnification”). The Secretary of the Corporation shall, promptly upon receipt
of such a Request for Indemnification, advise the Board of Directors in writing
that Indemnitee has requested indemnification.
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(b) Upon
submission of a Request for Indemnification, a determination, (unless otherwise
ordered by a court), with respect to Indemnitee’s entitlement thereto, shall be
made as follows: (1) by the Board of Directors of the Corporation by a
majority vote of a quorum consisting of directors who were not parties to such
proceeding; (2) if such quorum is not obtainable or, even if obtainable, by
majority vote of a committee duly designated by the Board of Directors (in
which
directors who are parties may participate) consisting solely of two or more
directors not at the time parties to the Proceeding; (3) by Independent
Counsel: (i) selected by the Board of Directors prescribed in
paragraph (a) or the committee prescribed in paragraph (b); or
(ii) if a quorum of the Directors cannot be obtained for paragraph (a)
and the committee cannot be designated under paragraph (b), selected by
majority vote of the full Board of Directors (in which directors who are parties
may participate); or (4) by the Shareholders by a majority vote of a quorum
consisting of Shareholders who were not parties to such proceeding, or if no
such quorum is obtainable, by a majority vote of Shareholders who were not
parties to such proceeding.
(c) If
a
determination is to be made by Independent Counsel, the Corporation shall pay
all fees and expenses of Independent Counsel in making such determination.
8. Presumptions
and Effect of Certain Proceedings.
(a) When
making a determination with respect to entitlement to indemnification, the
person, persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification if Indemnitee has submitted a Request
for Indemnification in accordance with Section 7(a) and the Corporation shall
have the burden of proof to overcome that presumption.
(b) If
the
person, persons or entity empowered or selected under Section 7 to
determine whether Indemnitee is entitled to indemnification denies such request,
in whole or in part, or shall not have made such determination within sixty
(60) days after receipt by the Corporation of the request therefor, the
Indemnittee may seek to establish any rights to indemnification granted by
Section 1 of this Agreement in any court of competent jurisdiction. The
Indemnittee’s expenses (including attorneys’ fees) incurred in connection with
successfully establishing Indemnittee’s right to indemnification, in whole or in
part, in any such Proceeding or otherwise shall also be indemnified by the
Corporation.
(c) The
termination of any Proceeding or of any claim, issue or matter related thereto
by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or
its
equivalent, shall not (except as otherwise expressly provided in this Agreement
or by law) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which Indemnitee reasonably believed to be in or not opposed to the
best
interest of the Corporation or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful. In addition, neither the failure of the Independent Counsel to have
made a determination as to whether Indemnitee has met any particular standard
of
conduct or had any particular belief, nor an actual determination by the
Independent Counsel that the Indemnitee has not met such standard of conduct
or
did not have such belief, prior to the commencement of proceedings by Indemnitee
to secure an arbitral or judicial determination that Indemnitee should be
indemnified under applicable law shall be a defense to Indemnitee’s claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief.
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9. Exceptions.
Any
other provision herein to the contrary notwithstanding, the Corporation shall
not be obligated pursuant to the terms of this Agreement:
(a) Excluded
Action or Omissions.
To
indemnify Indemnitee under circumstances that would render such indemnification
unlawful under Florida law.
(b) Claims
Initiated by Indemnitee.
To
indemnify or advance expenses to Indemnitee with respect to a Proceeding (or
part thereof) initiated by Indemnitee, except with respect to: (1) a
Proceeding brought to establish or enforce a right to indemnification (which
shall be governed by the provisions of Section 7(b) of this Agreement); or
(2) a Proceeding (or part thereof) of which the Indemnitee has provided
notice to the Board of Directors of Corporation of his intent to commence such
Proceeding and for which the Board of Directors has not denied authorization
to
Indemnitee to commence such Proceeding (or any part thereof) within sixty (60)
days of its receipt of such notice, and then, Indemnitee shall be entitled
to
indemnification and the advancement of Expenses for such Proceeding initiated
by
Indemnitee only upon such terms and conditions as the Board of Directors may
deem appropriate.
(c) Claims
Under Section 16(b).
To
indemnify Indemnitee for Expenses and payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 16(b)
of
the Securities Exchange Act of 1934, as amended, or any similar successor
statute as evidenced by a judgment or ruling in any judicial, administrative
or
alternative dispute resolution proceeding.
10. Non-Exclusivity;
Survival of Rights; Insurance.
(a) The
rights of indemnification and to receive advancement of Expenses as described
by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Corporation's
Amended and Restated Articles of Incorporation, the Corporation's Bylaws, any
agreement, a vote of shareholders, a resolution of Disinterested Directors
or
otherwise. No amendment, alteration or repeal of the Corporation's Amended
and
Restated Articles of Incorporation or Bylaws or of any provision hereof shall
be
effective as to Indemnitee with respect to any action or omission by such
Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration
or repeal. To the extent that a change in the laws of the State of Florida
(whether by statute or judicial action) permits greater indemnification by
agreement than would be afforded currently under the Corporation’s Amended and
Restated Articles of Incorporation, Bylaws and 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. The provisions of this Agreement shall
continue as to an Indemnitee whose Corporate Status has ceased and shall inure
to the benefit of Indemnitee’s heirs, executors and administrators.
(b) The
Corporation shall maintain directors’ and officers’ liability insurance,
covering Indemnitee, with commercially reasonable coverage terms and limits
for
so long as Indemnitee serves as a director of the Corporation or an Affiliate
of
the Corporation, provided and to the extent that such insurance is available
on
a commercially reasonable basis. However, the Corporation agrees that the
provisions hereof shall remain in effect regardless of whether insurance
coverage is at any time obtained or retained by the Corporation; except that
any
payments made under an insurance policy shall reduce the obligations of the
Company hereunder.
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11. Severability.
If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be in
any
way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
12. Definitions.
For
purposes of this Agreement:
(a) “Corporate
Status” means the status of a person who is or was an executive officer and/or
director of the Corporation or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person
is
or was serving at the request of the Corporation. Any election or appointment
of
an Indemnitee as an executive officer and/or director of the Corporation or
of
any corporation, partnership or joint venture which is a subsidiary or affiliate
of the Corporation, or of a trust or employee benefit plan of the Corporation
or
any such subsidiary or affiliate, shall conclusively evidence that such
Indemnitee’s service in such capacity was at the request of the Corporation.
(b) “Disinterested
Director” means a director of the Corporation who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.
(c) “Expenses”
means all attorneys’ fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel charges, postage, delivery service fees, and
all
other disbursements or expenses of the types customarily incurred in connection
with prosecuting, defending, preparing to prosecute or defend, investigating,
or
being or preparing to be a witness in a Proceeding.
(d) “Indemnitee”
means any person who is, or is threatened to be made, a witness in or a party
to
any Proceeding as described in Sections 2, 3, 4 or 5 by reason of
Indemnitee’s Corporate Status.
(e) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years
has been, retained to represent: (i) the Corporation or Indemnitee in any
matter (other than with respect to the rights of Indemnitee under this Agreement
or other indemnities under similar indemnity agreements); or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Corporation or Indemnitee in an action to determine Indemnitee’s rights under
this Agreement.
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(f) “Proceeding”
means any action, suit, indictment, information, arbitration, alternate dispute
resolution mechanism, inquiry, investigation, congressional, regulatory or
administrative hearing or any other proceeding whether civil, criminal,
regulatory, administrative or investigative, except one initiated by an
Indemnitee unless such Proceeding was authorized by the Board of Directors
or
Indemnitee is enforcing Indemnitee’s rights to indemnification and/or
advancement of Expenses. For purposes of this definition, a counterclaim, cross
claim or third party claim in a Proceeding shall be considered a separate and
distinct Proceeding.
13. Notification
and Defense of Claim.
(a) Indemnitee
shall give the Corporation notice in writing as soon as reasonably practicable
of any claim made against him/her for which indemnity will or could be sought
under this Agreement. In addition, Indemnitee shall, at the Corporations’
expense give the Corporation such information and cooperation as it may
reasonable require and as shall be within Indemnitee’s power. Notice to the
Corporation shall be directed to 21st
Century
Holding Company, 0000 Xxxx Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx,
Xxxxxxx 00000, Attention: Xxxxx X. Prygelski, Chief Financial Officer (or such
other address as the Corporation shall designate in writing to Indemnitee).
Notices to Indemnitee shall be directed to the address set forth below the
signature of the Indemnitee on this Agreement (or such other address as the
Indemnitee shall designate in writing to the Corporation). Notices shall be
deemed received three (3) days after the date postmarked, if sent by
prepaid certified mail, return receipt requested, properly addressed.
(b) In
the
event the Corporation shall be obligated to pay the Expenses of Indemnitee
with
respect to a Proceeding, as provided in this Agreement, the Corporation, if
appropriate, shall be entitled to assume the defense of such Proceeding, with
counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee
of
written notice of its election to do so. After delivery of such notice, approval
of such counsel by Indemnitee and the retention of such counsel by the
Corporation, the Corporation will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same Proceeding, provided that Indemnitee shall have the right
to
employ Indemnitee’s own counsel in such Proceeding at Indemnitee’s own expense.
Notwithstanding the above provisions of this Section 13(b), the Corporation
shall not be entitled to assume the defense of a Proceeding with counsel of
its
choosing, and all Expenses incurred by Indemnitee in defending such a Proceeding
with Indemnitee’s own counsel shall be the obligation of the Corporation, if
(i) the employment of Indemnitee’s own counsel has been previously
authorized in writing by the Corporation; (ii) counsel to the Corporation
or Indemnitee shall have reasonably concluded that there may be a conflict
of
interest or position, or reasonably believes that a conflict is likely to arise,
on any significant issue between the Corporation and Indemnitee in the conduct
of any such defense; or (iii) the Corporation shall not, in fact, have
employed counsel to assume the defense of such Proceeding, except as otherwise
expressly provided by this Agreement. The Corporation shall not be entitled,
without the consent of Indemnitee, to assume the defense of any Proceeding
brought by or in the right of the Corporation or as to which counsel for the
Corporation or Indemnitee shall have reasonably made the conclusion provided
for
in clause (ii) above.
14. Governing
Law, Amendment.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Florida. This Agreement constitutes the entire may be amended or
modified only by a writing executed and signed by the parties hereto. This
Agreement may be executed in any number of counterparts, each of which shall
constitute one and the same original.
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15. Successors
and Assigns.
The
obligations of the Company to the Indemnitee hereunder shall survive and
continue as to the Indemnitee even if the Indemnitee ceases to be a director,
officer, employee, adviser and/or agent of the Corporation. Each and all of
the
covenants, terms and all of the covenants, terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the successors
and
assigns of the Corporation and upon the death of the Indemnitee, to the benefit
of the estate, heirs, executors, administrators and personal representatives
of
the Indemnitee.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement on and as of the day and year first
above written.
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21st
CENTURY HOLDING COMPANY,
a
Florida corporation
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Name:
Title:
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INDEMNITEE:
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