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EXHIBIT 10.32
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT, dated as of this 16th day of May, 1995, is
made by and between DURAKON INDUSTRIES, INC., a Michigan corporation (the
"Company"), and Xxxxx X. Xxxxx ("Xxxxx"), for himself and the other Indemnitees
hereafter referred to.
In consideration of the consent of Xxxxx to serve as a member of the
board of directors of the Company, and to induce him so to serve, and in
further consideration of the sum of $10.00 paid to the Company, the receipt of
which is acknowledged by it, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Definitions.
(a) Indemnitee. For purposes of this Agreement, "Indemnitee" means and
includes (i) Xxxxx, his spouse, heirs, estate, executors, administrators and
personal representatives, and (ii) any other entity owned or controlled by the
aforementioned person or for which the aforementioned person is an advisor or
consultant.
(b) Expenses. For purposes of this Agreement, "Expense" includes all
direct and indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys' fees and related disbursements, other out-of-pocket
costs and reasonable compensation for time spent by the Indemnitee for which he
or it is not otherwise compensated by the Company or any third party) actually
and reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to the indemnification under this Agreement, the Business Corporation Act
of Michigan or otherwise; provided, however, that expenses shall not include
any judgements, fines, ERISA excise taxes or penalties or amounts paid in
settlement of a proceeding.
(c) Proceeding. For the purposes of this Agreement, "Proceeding" means
any threatened, pending, or completed action, suit or other proceeding, formal
or informal; whether civil, criminal, administrative, investigation or of any
other type whatsoever.
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(d) Subsidiary. For purposes of this Agreement, "Subsidiary" means any
corporation of which at least fifty (50%) percent of the outstanding voting
securities is owned directly or indirectly by the Company.
(e) Other. For purposes of this Agreement, references to Kelly's
service as a director shall include his service on a committee of the board of
directors and shall also include his service in any capacity which imposes
duties on or involves services by him with respect to an employee benefit plan,
its participants or beneficiaries; and Xxxxx shall be deemed to have acted in
the Company's best interests if he acted in a manner he reasonably believed to
be in the interest of the participants or beneficiaries of an employee benefit
plan.
2. Third Party Actions.
(a) If an Indemnitee was or is a party or is threatened to be made a
party to any proceeding (other than an action by or in the right of the
Company) by reason of the fact that Xxxxx is or was a director or officer of
the Company or a Subsidiary, or by reason of anything done or not done by him
while serving in any such capacity, the Company shall indemnify the Indemnitee
against any and all expenses and liabilities of any type whatsoever (including,
but not limited to, judgements, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) actually and reasonably incurred by such Indemnitee
in connection with the investigation, defense, settlement or appeal of such
proceeding unless Xxxxx engaged in material, willful misconduct of a culpable
nature in the performance of his duties to the Company and could not reasonably
have believed such misconduct to have been not opposed to the Company's best
interests.
(b) Direct and Derivative Actions. If an Indemnitee was or is a party
or is threatened to be made a party to any proceeding by or in the right of the
Company to procure a judgment in its favor by reason of the fact that Xxxxx is
or was a director or officer of the Company or a Subsidiary, or by reason of
anything done or not done by him while serving in any such capacity, the
Company shall indemnify the Indemnitee against any judgements and amounts paid
in settlement of any such proceeding and all expenses actually and reasonably
incurred by such Indemnitee in connection with the investigation, defense,
settlement, or appeal of such proceeding
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unless Xxxxx engaged in material, willful misconduct of a culpable nature in
the performance of his duties to the Company and could not reasonably have
believed such misconduct to have been not opposed to the Company's best
interests; provided that the Company shall not be required to indemnify any
Indemnitee against an accounting under Section 16(b) of the Securities Exchange
Act of 1934 of profits made from the purchase or sale by the Indemnitee of
securities.
(c) No Presumption. The termination of any proceeding by judgement,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that Xxxxx was guilty of
the misconduct referred to in Sections 2(a) and 2(b).
(d) Other Involvement in Proceedings. If an Indemnitee is involved in
a proceeding (including involvement as a witness) other than as a party or as a
person who is threatened to be made a party, by reason of the fact that Xxxxx
is or was an officer or director of the Company or a Subsidiary, or by reason
of anything done or not done by him while serving in any such capacity, the
Company shall indemnify the Indemnitee against any and all expenses and
liabilities actually and reasonably incurred by such Indemnitee in connection
with such proceeding.
3. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Agreement or otherwise to indemnification by the Company for
some or a portion of any expenses or liabilities of any type whatsoever
(including, but not limited to, judgements, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) incurred by such Indemnitee in the
investigation, defense or appeal of a proceeding but not entitled, however, to
indemnification for all of the total amount thereof, the Company shall
nevertheless indemnify the Indemnitee for such total amount except as to the
portion thereof to which the Indemnitee is not entitled.
4. Mandatory Advancement of Expenses. The Company shall advance all
expenses incurred by an Indemnitee in connection with the investigation,
defense, settlement or appeal of any proceeding to which the Indemnitee is a
party or is threatened to be made a party or with
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respect to which the Indemnitee is otherwise involved (including involvement as
a witness) by reason of the fact that Xxxxx is or was a director or officer of
the Company or a Subsidiary. Xxxxx hereby undertakes, and each other Indemnitee
shall undertake, to repay such amounts advanced only if, and to the extent
that, it shall ultimately be determined that Xxxxx or such other Indemnitee is
not entitled to be indemnified by the Company as authorized hereby. The
advances to be made hereunder shall be paid by the Company to Xxxxx or the
other Indemnitee within twenty (20) days following delivery of a written
request therefor to the Company.
5. Notice and Other Indemnification Procedures.
(a) Promptly after receipt by an Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the Indemnitee
shall, if the Indemnitee believes that indemnification with respect thereto may
be sought from the Company under this Agreement, notify the Company of the
commencement or threat of commencement thereof; provided that the Indemnitee's
failure to so promptly notify the Company shall not relieve the Company of its
obligations (whether hereunder or otherwise) to indemnify the Indemnitee.
(b) If, at the time of the receipt of a notice of the commencement of a
proceeding pursuant to Section 5(a) hereof, the Company has director and
officer liability insurance in effect, the Company shall give prompt notice of
the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(c) If the Company shall be obligated to pay the expenses of any
proceeding against the Indemnitee, the Company may, if it so desires, ask to be
allowed to assume the defense of such proceeding, with counsel approved by the
Indemnitee and paid for by the Company. While the granting or refusal of such
request shall be within the Indemnitee's discretion, the Indemnitee shall not
arbitrarily or capriciously refuse.
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(d) Liberal Construction. This Agreement shall be liberally
construed in favor of indemnification, reimbursement and advancement of
expenses, and there shall be a rebuttable presumption that an Indemnitee is
entitled to the same and the Company shall bear the burden of asserting, and of
proving by a preponderance of the evidence, that the Indemnitee is not so
entitled.
(e) Suit by Indemnitee. If a claim for indemnification is not paid in
full by the Company within twenty (20) days after a written demand therefore
has been received by the Company, the Indemnitee making the same may at any
time thereafter bring suit against the Company to recover the unpaid amount of
such claim. Neither of the following shall be a defense to any suit by an
Indemnitee or be entitled to any weight at all:
(i) The failure of the Company (or of its board of directors or a
committee thereof, independent legal counsel, or the shareholders) to
have made a determination that indemnification, reimbursement or
advancement of expenses is proper;
(ii) An actual determination by the Company (or by its board of
directors or a committee thereof, independent legal counsel, or the
shareholders) that an Indemnitee is not entitled to indemnification,
reimbursement or advancement of expenses.
6. Limitation of Actions and Release of Claims. No proceeding shall be
brought and no cause of action shall be asserted by or on behalf of the Company
or any Subsidiary against an Indemnitee after the expiration of one (1) year
from the act or omission of the Indemnitee upon which such proceeding is based;
however, in a case where the Indemnitee fraudulently conceals the facts
underlying such cause of action, no proceeding shall be brought and no cause of
action shall be asserted after the expiration of one (1) year from the earlier
of (a) the date the Company or Subsidiary discovers such facts, or (b) the date
the Company or Subsidiary could have discovered such facts by the exercise of
reasonable diligence. Any claim or cause of action of the Company or any
Subsidiary, including claims predicated upon the negligent act or omission of
the Indemnitee, shall be extinguished and deemed released unless asserted by
filing
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of a legal action within such period. This Section 6 shall not apply to any
cause of action which has accrued on the date hereof and of which the Company
has no actual knowledge apart from the Indemnitee's knowledge.
7. Non-exclusivity. The provisions for indemnification and advancement
of expense set forth in this Agreement are not exclusive of, and shall be in
addition to, any other rights which an Indemnitee may have under any provision
of law, the Company's Articles of Incorporation or Bylaws, the vote of the
Company's shareholders or disinterested directors, other agreements, or
otherwise.
8. Interpretation of Agreement. This Agreement is to be interpreted
and enforced so as to provide indemnification to an Indemnitee to the fullest
extent now or hereafter permitted by law. An Indemnitee's rights hereunder
shall apply to claims made against such Indemnitee arising out of acts or
omissions which occurred prior to the date hereof as well as those which occur
after the date hereof.
9. 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 the Agreement (including without limitation, all portions of any
sections of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby, and (b) to
the fullest extent possible, the provisions of this Agreement, (including,
without limitation, all portions of any paragraph of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable and to give effect to Section 7 hereof.
10. Modification. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the party against
which the same is sought to be enforced.
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11. Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (a) on
the date of delivery if delivered by hand, or (b) on the third business day
after being deposited in the United States registered or express mail, postage
prepaid. Addresses for notice to either party are as shown on the signature
page of this Agreement, or as subsequently modified by written notice. Each
party agrees to receipt of any notice received promptly upon request.
12. Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Michigan, as applied to
contracts between Michigan residents entered into and to be performed entirely
within Michigan.
13. Consent to Jurisdiction. The Company and each Indemnitee hereby
irrevocably consent to the jurisdiction of the courts of the State of Michigan
and the Company irrevocably consents to the jurisdiction of any court,
wheresoever located, in which an Indemnitee brings any action or proceeding
which arises out of or relates to this Agreement. The Company agrees not to
initiate any such action or proceeding in any state other than Michigan.
The parties hereto have entered into this Indemnity Agreement effective
as of the date and year first above written.
DURAKON INDUSTRIES, INC.
By: _________________________________________
Xxxxxxx Xxxxxxx
Its: Chairman of the Board of Directors
0000 X. Xxxxxx Xxxx
Xxxxxx, XX 00000
_____________________________________________
Xxxxx X. Xxxxx
Address: 0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
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