FORM OF INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (“Agreement”) is made as of
the ____ day of, ____ by ____ and between The Gorman-Rupp Company,
an Ohio corporation (the “Company”), and ____ (the
“Indemnitee”), a Director and an officer of the
Company.
A.
The Indemnitee is presently serving as a Director and an officer of
the Company and the Company desires the Indemnitee to continue in
those capacities. The Indemnitee is willing, subject to certain
conditions, including, without limitation, the execution and
performance of this Agreement by the Company, to continue in those
capacities.
B.
In addition to the indemnification to which the Indemnitee is
entitled under the Regulations of the Company, as amended (the
“Regulations”), the Company has obtained, at its sole
expense, insurance protecting the Company and its officers and
Directors, including the Indemnitee, against certain losses arising
out of actual or threatened actions, suits or proceedings to which
such persons may be made or threatened to be made parties. However,
as a result of circumstances having no relation to, and beyond the
control of, the Company and the Indemnitee, the scope of that
insurance has, from time to time, been reduced, and may be further
reduced, and there can be no assurance of the continuation or
renewal of that insurance.
Accordingly,
and in order to induce the Indemnitee to continue to serve in his
present capacities, the Company and the Indemnitee agree as
follows:
1.
CONTINUED SERVICE. The Indemnitee shall continue to serve at the
will of the Company as a Director and an officer of the Company so
long as he is duly elected and qualified in accordance with the
Regulations or until he resigns in writing in accordance with
applicable law.
2.
INITIAL INDEMNITY. (a) The Company shall indemnify the
Indemnitee if or when he is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Company), by reason of the fact that he is or was a Director or an
officer of the Company or is or was serving at the request of the
Company as a director, trustee, officer, employee, member, manager
or agent of another corporation, domestic or foreign, nonprofit or
for profit, a limited liability company, or a partnership, joint
venture, trust or other enterprise, or by reason of any action
alleged to have been taken or omitted in any such capacity, against
any and all costs, charges, expenses (including, without
limitation, fees and expenses of attorneys and/or others; all such
costs, charges and expenses being herein jointly referred to as
“Expenses”), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by the Indemnitee in
connection therewith including any appeal of or from any judgment
or decision, unless it is proved by clear and convincing evidence
in a court of competent jurisdiction that the Indemnitee’s
action or failure to act involved an act or omission
undertaken
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with deliberate
intent to cause injury to the Company or undertaken with reckless
disregard for the best interests of the Company. In addition, with
respect to any criminal action or proceeding, indemnification
hereunder shall be made only if the Indemnitee had no reasonable
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of “nolo contendere” or its
equivalent, shall not, of itself, create a presumption that the
Indemnitee did not satisfy the foregoing standard of conduct to the
extent applicable thereto.
(b) The
Company shall indemnify the Indemnitee if or when he is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by or in the right of the
Company to procure a judgment in its favor, by reason of the fact
that the Indemnitee is or was a Director or an officer of the
Company or is or was serving at the request of the Company as a
director, trustee, officer, employee, member, manager or agent of
another corporation, domestic or foreign, nonprofit or for profit,
a limited liability company, or a partnership, joint venture, trust
or other enterprise, against any and all Expenses actually and
reasonably incurred by the Indemnitee in connection with the
defense or settlement thereof or any appeal of or from any judgment
or decision, unless it is proved by clear and convincing evidence
in a court of competent jurisdiction that the Indemnitee’s
action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to the Company or undertaken
with reckless disregard for the best interests of the Company,
except that no indemnification shall be made in respect of any
action or suit in which the only liability asserted against the
Indemnitee is pursuant to Section 1701.95 of the Ohio Revised Code
(the “ORC”).
(c) Any
indemnification under Section 2(a) or 2(b) (unless ordered by a
court) shall be made by the Company only as authorized in the
specific case upon a determination that indemnification of the
Indemnitee is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 2(a) or 2(b).
Such authorization shall be made (i) by the Directors of the
Company (the “Board”) by a majority vote of a quorum
consisting of Directors who were not and are not parties to or
threatened with such action, suit or proceeding, or (ii) if
such a quorum of disinterested Directors is not available or if a
majority of such quorum so directs, in a written opinion by
independent legal counsel (designated for such purpose by the
Board) which shall not be an attorney, or a firm having associated
with it an attorney, who has been retained by or who has performed
services for the Company, or any person to be indemnified, within
the five years preceding such determination, or (iii) by the
shareholders of the Company (the “Shareholders”), or
(iv) by the court in which such action, suit or proceeding was
brought.
(d) To
the extent that the Indemnitee has been successful on the merits or
otherwise, including, without limitation, the dismissal of an
action without prejudice, in defense of any action, suit or
proceeding referred to in Section 2(a) or 2(b), or in defense of
any claim, issue or matter therein, he shall be indemnified against
Expenses actually and reasonably incurred by him in connection
therewith. Expenses actually and reasonably incurred by the
Indemnitee in defending any such action, suit or proceeding shall
be paid by the Company as they are incurred in advance of the final
disposition of such action, suit or proceeding under the procedure
set forth in Section 4(b) hereof.
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(e) For
purposes of this Agreement, references to “other
enterprises” shall include employee benefit plans; references
to “fines” shall include any excise taxes assessed on
the Indemnitee with respect to any employee benefit plan;
references to “serving at the request of the Company”
shall include any service as a director, officer, employee or agent
of the Company which imposes duties on, or involve services by, the
Indemnitee with respect to an employee benefit plan, its
participants or beneficiaries; references to the masculine shall
include the feminine; and references to the singular shall include
the plural and vice versa.
3.
ADDITIONAL INDEMNIFICATION. Pursuant to Section 1701.13(E)
(6) of the ORC, without limiting any right which the
Indemnitee may have pursuant to Section 2 hereof or any other
provision of this Agreement or the Articles of Incorporation, as
amended, of the Company (the Articles), the Regulations, the ORC,
any policy of insurance, or otherwise, but subject to any
limitation on the maximum permissible indemnity which may exist
under applicable law at the time of any request for indemnity
hereunder and subject to the following provisions of this
Section 3, the Company shall indemnify the Indemnitee against
any amount which he is or becomes obligated to pay relating to or
arising out of any claim made against him because of any act,
failure to act or neglect or breach of duty, including any actual
or alleged error, misstatement or misleading statement, which he
commits, suffers, permits or acquiesces in while acting in his
capacity as a Director or an officer of the Company. The payments
which the Company is obligated to make pursuant to this
Section 3 shall include, without limitation, judgments, fines
and amounts paid in settlement and any and all Expenses actually
and reasonably incurred by the Indemnitee in connection therewith
including any appeal of or from any judgment or decision; provided,
however, that the Company shall not be obligated under this
Section 3 to make any payment in connection with any claim
against the Indemnitee:
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