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EXHIBIT 10.19
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made on February 7, 1994,
by and among Venture Holdings Trust (the "Trust"), Vemco, Inc., Venture
Industries Corporation, Venture Industries Canada Ltd., Venture Mold &
Engineering Corporation, Venture Leasing Company, Vemco Leasing, Inc., Venture
Holdings Corporation and Venture Service Company (collectively, the
"Subsidiaries"), and XXXXX X. XXXXXX ("Executive"). The Trust and the
Subsidiaries are referred to herein as the "Company."
Recitals
A. Executive serves as an officer and/or director of one or more of the
Subsidiaries and the Company desires Executive to continue in such capacities.
Executive is willing to continue to serve in such capacities if Executive
receives the protections provided by this Agreement.
B. Company believes that (1) litigation against corporate officers and
directors, regardless of whether meritorious, is expensive and time-consuming
for the official to defend; (2) there is a substantial risk of a large judgment
or settlement in litigation in which a corporate official was neither culpable
nor profited personally to the detriment of the corporation; (3) it is
increasingly difficult to attract and keep qualified officers and directors
because of such potential liabilities; and (4) it is important for officers and
directors to have assurance that indemnification will be available if they act
in accordance with reasonable business standards, it is in the best interests of
Company and its shareholders for Company to contractually obligate itself to
indemnify its officers and directors and to set forth the details of the
indemnification process.
C. Based upon the conclusions stated in Recital B above, to induce
Executive to continue to serve as one of the Company's officers and/or directors
and in consideration of Executive's continued service, Company wishes to enter
into this Agreement with Executive.
Therefore, Company and Executive agree as follows:
1. Indemnification
(a) The Subsidiaries and the Trust (collectively, the "Company")
jointly and severally agree to indemnify Executive to the fullest extent
permitted under applicable law if Executive was or is a party or threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding of any kind, whether civil, criminal administrative or investigative
and whether formal or informal (including actions by or in the right of Company
and any preliminary inquiry or claim by any person or authority), by reason of
the fact that Executive is or was a director, officer, partner, trustee,
employee or agent of Company or is or was servicing at Company's request as a
director, officer, employee or agent of another corporation (including a
subsidiary of any Subsidiary), limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise, whether or not for
profit, or by reason of anything done or not done by Executive in any such
capacity (collectively, "Covered Matters"). Such indemnification will cover all
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Expenses (as defined in paragraph 5(a) below), liabilities, judgments (including
punitive and exemplary damages), penalties, fines (including excise taxes
relating to employee benefit plans and civil penalties) and amounts paid in
settlement which are incurred or imposed upon Executive in connection with a
Covered Matter (collectively, "Indemnified Amounts
(b) Executive will be indemnified for all Indemnified Amounts and
Company will defend Executive against claims (including threatened claims and
investigations) in any way related to Executive's service as an officer or
director including claims brought by or on behalf of Company or any subsidiary
of any Subsidiary, except if it is finally determined by the court of last
resort (or by a lower court if not timely appealed) that (1) the payment is
prohibited by applicable law or (2) Executive engaged in intentional misconduct
for the primary purpose of significant personal financial benefit through
actions adverse to Company's and its shareholders' best interests. As used in
this Agreement, (1) "intentional misconduct" will not include violations of
disclosure or reporting requirements of federal securities laws or a breach of
fiduciary duties (including duties of loyalty or care) if Executive relied on
advice of counsel to Company, or otherwise reasonably believed that there was no
violation of such requirements or breach of fiduciary duty; and (2) "significant
personal financial benefit" will not include compensation or employee benefits
for past or prospective services to Company or Company's successor or in
connection with an agreement not to compete or similar agreement, or any benefit
received by directors or officers or shareholders of Company generally.
(c) If Executive is entitled under this Agreement to indemnification
for less than all of the amounts incurred by Executive in connection with a
Covered Matter, Company will indemnify Executive for the indemnifiable amount.
2. Agent for Trust and the subsidiaries. The Trust and the Subsidiaries
hereby appoint Venture Service Company ("Agent") as their agent for giving and
receiving certain notices relating to the Executive's indemnification claims,
and for making certain determinations relating to the Executive's right to
indemnification as further described herein.
3. Claims for Indemnification. Executive will give Agent written notice
of any claim for indemnification under this Agreement. Payment requests will
include a schedule setting forth in reasonable detail the amount requested and
will be accompanied (or, if necessary, followed) by copies of the relevant
invoices or other documentation. Upon the Agent's request, Executive will
provide the Trust with a copy of the document or pleading, if any, notifying
Executive of the Covered Matter. To the extent practicable, Company will pay
Indemnified Amounts directly without requiring Executive to make any prior
payment.
4. Determination of Right-to Indemnification.
(a) Executive will be presumed to be entitled to indemnification
under this Agreement and will receive such indemnification, subject to
paragraph 4(b) below, irrespective of whether the Covered Matter involves
allegations of intentional misconduct, alleged violations of
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Section 16(b) of the Securities Exchange Act of 1934, alleged violations of
Section 10(b) of the Securities Exchange Act of 1934 (including Rule l0b-5
thereunder), breach of Executive's fiduciary duties (including duties of loyalty
or care) or any other claim.
(b) If, in the opinion of counsel to the Agent, applicable law
permits indemnification in a Covered Matter only as authorized in the specific
case upon a determination that indemnification is proper in the circumstances
because Executive has met a standard of conduct established by applicable law,
and upon an evaluation of Indemnified Amounts to be paid in connection with such
Covered Matter, the following will apply:
(1) Agent will give Executive notice that a de termination and
evaluation will be made under this paragraph 4(b); such notice will be
given immediately after receipt of counsel's opinion that such a
determination and evaluation is necessary and will include a copy of such
opinion.
(2) Such determination and evaluation will be made in good
faith, as follows:
(A) by a majority vote of a quorum of Agent's Board of
Directors who are not parties or threatened to be made parties to the
Covered Matter in question ("Disinterested Directors") or, if such a
quorum is not obtainable, by a majority vote of a committee of
Disinterested Directors who are selected by the Board; or
(B) by an attorney or firm of attorneys, having no previous
relationship with Agent or Executive, which is selected by Agent and
Executive; or
(C) by all independent directors of Agent (as defined in
the Michigan Business Corporation Act) who are not parties or
threatened to be made parties to the Covered Matter.
(3) Executive will be entitled to a hearing before the entire
Board of Directors of Agent and any other person or persons making the
determination and evaluation under clause (2) above Executive will be
entitled to be represented by counsel at such hearing.
(4) The cost of a determination and evaluation under this
paragraph 4(b) (including attorneys' fees and other expenses incurred by
Executive in preparing for and attending the hearing contemplated by clause
(3) above and otherwise in connection with the determination and evaluation
under this paragraph 4(b)) will be borne by Company.
(5) The determination will be made as promptly as possible after
final adjudication of the Covered Matter.
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(6) Executive will be presumed to have met the required standard
of conduct under this Section 4(b) unless it is clearly demonstrated to the
determining body that Executive has not met the required standard of
conduct.
5. Advance of Expenses.
(a) Before final adjudication of a Covered Matter, upon Executive's
request pursuant to paragraph 2 above, Company will promptly either advance
Expenses directly or reimburse Executive for all Expenses. As used in this
Agreement, "Expenses" means all costs and expenses (including attorneys' fees,
expert fees, other professional fees and court costs) incurred by Executive in
connection with a Covered Matter other than judgments, penalties, fines and
settlement amounts.
(b) If, in the opinion of counsel to Agent, applicable law permits
advancement of Expenses only as authorized in the specific case upon a
determination that Executive has met a standard of conduct established by
applicable law, the determination will be made at Company's cost, in good faith
and as promptly as possible after Executive's request, in accordance with
clauses (1) through (4) and (6) of paragraph 4(b) above. Because of the
difficulties inherent in making any such determination before final disposition
of the Covered Matter, to the extent permitted by law such advance will be made
if (1) the facts then known to those persons making the determination, without
conducting a formal independent investigation, would not preclude advancement of
Expenses under applicable law and (2) Executive submits to Agent a written
affirmation of Executive's belief that Executive has met the standard of conduct
necessary for advancement of Expenses under the circumstances.
(c) Executive will repay any Expenses that are advanced under this
paragraph 5 if it is ultimately determined, in a final, non-appealable judgment
rendered by the court of last resort (or by a lower court if not timely
appealed), that Executive is not entitled to be indemnified against such
Expenses. This undertaking by Executive is an unlimited general undertaking but
no security for such undertaking will be required.
6. Defense of Claim.
(a) Except as provided in paragraph 6(c) below, Company, jointly with
any other indemnifying party, will be entitled to assume the defense of any
Covered Matter as to which Executive requests indemnification.
(b) Counsel selected by Executive to defend any Covered Matter will be
subject to Executive's advance written approval, which will not be unreasonably
withheld.
(c) Executive may employ Executive's own counsel in a Covered Matter
and be fully reimbursed therefor if (1) Agent approves, in writing, the
employment of such counsel or (2) either (A) Executive has reasonably concluded
that there may be a conflict of interest between
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Company and Executive or between Executive and other parties represented by
counsel employed by Agent to represent Executive in such action or (B) Agent has
not employed counsel reasonably satisfactory to Executive to assume the defense
of such Covered Matter promptly after Executive's request.
(d) Neither Company nor Executive will settle any Covered Matter
without the other's written consent, which will not be unreasonably withheld.
(e) If Executive is required to testify (in court proceedings,
depositions, informal interviews or otherwise), consult with counsel, furnish
documents or take any other reasonable action in connection with a Covered
Matter, Company will reimburse Executive for all reasonable expenses incurred by
Executive in connection therewith.
7. Disputes: Enforcement
(a) If there is a dispute relating to the validity or enforceability
of this Agreement or a denial of indemnification, advance of Expenses or payment
of any other amounts due under this Agreement or any of the Subsidiaries'
Articles of Incorporation or Bylaws, Company will provide such indemnification,
advance of Expenses or other payment until a final, non-appealable judgment that
Executive is not entitled to such indemnification, advance of Expenses or other
payment has been rendered by the court of last resort (or by a lower court if
not timely appealed). Executive will repay such amounts if such final,
non-appealable judgment so requires.
(b) Company will reimburse all of Executive's reasonable expenses
(including attorneys' fees) in pursuing an action to enforce Executive's rights
under this Agreement unless a final, non-appealable judgment against Executive
has been rendered in such action by the court of last resort (or by a lower
court if not timely appealed). At Executive's request, such expenses will be
advanced by Company to Executive as incurred before final resolution of such
action by the court of last resort; such expenses will be repaid by Executive if
a final, non-appealable judgment in Company's favor is rendered in such action
by the court of last resort (or by a lower court if not timely appealed).
8. Rights Not Exclusive. The indemnification provided to Executive
under this Agreement will be in addition to any indemnification provided to
Executive by any law, agreement, Board resolution, provision of the Articles of
Incorporation or Bylaws of any Subsidiary or otherwise.
9. Subrogation. Upon payment of any Indemnified Amount under this
Agreement, Company will be subrogated to the extent of such payment to all of
Executive's rights of recovery therefor and Executive will take all reasonable
actions requested by Company (at no cost or penalty to Executive) to secure
Company's rights under this paragraph 9 including executing documents.
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10. Continuation of Indemnity. All of Company's obligations under this
Agreement will continue as long as Executive is subject to any actual or
possible Covered Matter, notwithstanding Executive's termination of service as
an officer or director.
11. Amendments. None of the Subsidiaries' Articles of Incorporation or
Bylaws will be changed to increase liability of officers or directors or to
limit Executive's indemnification. Any repeal or modification of any
Subsidiary's Articles of Incorporation or Bylaws or any repeal or modification
of the relevant provisions of any applicable law will not in any way diminish
any of Executive's rights or Company's obligations under this Agreement. This
Agreement cannot be amended except with the written consent of Company and
Executive.
12. Governing Law. This Agreement will be governed by Michigan law.
13. Successors.
(a) This Agreement will be binding upon and inure to the benefit of
the parties and their respective heirs, legal representatives and assigns.
(b) Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of any Subsidiary to assume all of Company's obligations
under this Agreement. Such assumption will not release Company from its
obligations under this Agreement.
14. Severability. The provisions of this Agreement will be deemed
severable, and if any part of any provision is held illegal, void or invalid
under applicable law, such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void or invalid in its entirety,
the remaining provisions of this Agreement will not in any way be affected or
impaired but will. remain binding in accordance with their terms.
15. Notices. All notices given under this Agreement will be in writing
and delivered either personally, by registered or certified mail (return receipt
requested, postage prepaid), by recognized overnight courier or by telecopy (if
promptly followed by a copy delivered personally, by registered or certified
mail or overnight courier), as follows:
If to Executive:
If to the Trust, the
Agent, the Company
or any Subsidiary: Venture Service Company
33662 Xxxxx X. Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: President
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or to such other address as either party furnishes to the other in writing.
16. Counterparts. This Agreement may be signed in counterpart.
17. Subsidiaries. As used in this Agreement, the term "subsidiary"
means any corporation in which any Subsidiary owns a majority interest.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date written above.
VENTURE HOLDINGS TRUST
By: /s/ Xxxxxxx X. Xxxxxxx
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VEMCO, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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VENTURE INDUSTRIES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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VENTURE INDUSTRIES CANADA LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
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VENTURE MOLD & ENGINEERING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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VENTURE LEASING COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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VEMCO LEASING, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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VENTURE SERVICE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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VENTURE HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX, EXECUTIVE
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