EXHIBIT 10.1
HAGGAR CORP.
INDEMNIFICATION
AGREEMENT
This Agreement
(“Agreement”) is made and entered into as of the 26th
day of August, 2005, by and between Haggar Corp., a Nevada
corporation (the “Company”), and
(“Indemnitee”).
RECITALS
WHEREAS, highly competent and
experienced persons are reluctant to serve corporations as
directors, executive officers or in other capacities unless they
are provided with adequate protection through insurance and
indemnification against claims and actions against them arising out
of their service to and activities on behalf of the
Company;
WHEREAS, the Board of Directors of
the Company (the “Board”) has determined that the
inability to attract and retain such persons would be detrimental
to the best interests of the Company and its stockholders and that
the Company should act to assure such persons that there will be
increased certainty of such protection in the future;
WHEREAS, the Board has also
determined that it is reasonable, prudent and necessary for the
Company, in addition to purchasing and maintaining directors’
and officers’ liability insurance (or otherwise providing for
adequate arrangements of self-insurance), contractually to obligate
itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be adequately
protected;
WHEREAS, Indemnitee is willing to
serve, continue to serve and to take on additional service for or
on behalf of the Company on the condition that Indemnitee be so
indemnified to the fullest extent permitted by law;
WHEREAS, Article 7 of the Third
Amended and Restated Articles of Incorporation of the Company
provides for indemnification of directors and officers to the
fullest extent permitted by law and Article 5 of the Amended
and Restated Bylaws contains provisions regarding indemnification;
and
WHEREAS, Section 78.751 of the
Nevada Revised Statutes, as amended (“NRS”), empowers
the Company to indemnify its officers, directors, employees and
agents by agreement and to indemnify persons who serve, at the
request of the Company, as the directors, officers, employees or
agents of another corporation, partnership, joint venture, trust or
other enterprise, and expressly provides that the indemnification
provided by NRS 78.751 is not exclusive of other rights to which
those indemnified thereunder may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
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NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants herein contained, and other
good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
Certain
Definitions
As used herein, the following words
and terms shall have the following respective meanings (whether
singular or plural):
“ Change in Control
” means (i) a merger or consolidation of the Company
with or into another entity, or the exchange of securities (other
than a merger or consolidation) by the holders of the Voting
Securities of the Company and the holders of Voting Securities of
any other entity, in which the shareholders of the Company
immediately before the transaction do not own 50% or more of the
combined voting power of the Voting Securities of the surviving
entity or its parent immediately after the transaction; (ii) a
dissolution of the Company; (iii) a transfer of all or
substantially all of the assets of the Company in one transaction
or a series of related transactions to one or more other persons or
entities; (iv) a transaction or series of transactions that
results in any entity, Person or “Group” (as defined
below), becoming the beneficial owner, directly or indirectly, of
securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding
securities; or (v) during any period commencing on or after
the date of this Agreement, individuals who at the beginning of the
period constituted the Board cease for any reason to constitute at
least a majority, unless the election of each director who was not
a director at the beginning of the period has been approved in
advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of the
period; provided , however , that a “Change in
Control” shall not be deemed to have occurred if the
ownership of 50% or more of the combined voting power of the
surviving corporation, asset transferee or the Company (as the case
may be), after giving effect to the transaction or series of
transactions, is directly or indirectly held by (A) a trustee
or other fiduciary under any employee benefit plan maintained by
the Company or any Subsidiary, (B) one or more of the
“executive officers” of the Company that held such
positions prior to the transaction or series of transactions, or
any entity, Person or Group under their control, (C) one or
more of the children of J.M. Haggar, Jr. or their lineal
descendants, or any entity, Person or Group under their control, or
(D) one or more members of the “senior management”
of the Company (as defined by the Chief Executive Officer of the
Company) that held such positions prior to the transaction or
series of transactions, or any entity, Person or Group under their
control. As used herein, “Group” shall have the
meaning set forth in Section 13(d)(3) and/or
14(d)(2) of the Exchange Act, and “executive
officer” shall have the meaning set forth in Rule 3b-7
promulgated under the Exchange Act.
“ Claim ” means
an actual or threatened claim or request for relief which was, is
or may be made by reason of anything done or not done by Indemnitee
in, or by reason of any event or occurrence related to,
Indemnitee’s Corporate Status.
“ Corporate Status
” means the status of a person who is, becomes or was a
director, officer, employee, agent or fiduciary of the Company or
is, becomes or was serving at the
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request of the Company as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, fiduciary
or similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise. For purposes of this
Agreement, the Company agrees that Indemnitee’s service on
behalf of or with respect to any Subsidiary of the Company shall be
deemed to be at the request of the Company.
“ Disinterested
Director ” with respect to any request by Indemnitee for
indemnification hereunder, means a director of the Company who at
the time of the vote is not a named defendant or respondent in the
Proceeding in respect of which indemnification is sought by
Indemnitee.
“ Exchange Act ”
means the Securities Exchange Act of 1934.
“ Expenses ”
means all direct and indirect costs (including, without limitation,
attorneys’ fees and disbursements, retainers,
accountant’s fees and disbursements, private investigator
fees and disbursements, court costs, transcript costs, fees and
expenses of experts, witness fees and expenses, travel expenses,
duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees and all other disbursements, costs
or expenses) of the types customarily incurred in connection with
prosecuting, defending (including affirmative defenses and
counterclaims), preparing to prosecute or defend, investigating,
being or preparing to be a witness in, or participating in or
preparing to participate in (including on appeal) a Proceeding and
all interest or finance charges attributable to any thereof.
Should any payments by the Company under this Agreement be
determined to be subject to any federal, state or local income or
excise tax, “Expenses” shall also include such amounts
as are necessary to place Indemnitee in the same after-tax position
(after giving effect to all applicable taxes) as Indemnitee would
have been in had no such tax been determined to apply to such
payments.
“ Independent Counsel
” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither
contemporaneously is, nor in the five years theretofore has been,
retained to represent: (a) the Company or Indemnitee in
any matter material to either such party (other than as Independent
Counsel under this Agreement or similar agreements), (b) any
other party to the Proceeding giving rise to a claim for
indemnification hereunder or (c) the beneficial owner,
directly or indirectly, of securities of the Company representing
5% or more of the combined voting power of the Company’s then
outstanding voting securities (other than, in each such case, with
respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnification
agreements). 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 Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
“ Independent Directors
” means the directors that qualify as independent,
disinterested, or a similar term as defined in the rules of
the principal securities exchange or inter-dealer quotation system
on which the Company’s common stock is then listed or
quoted.
“ NRS ” means the
Nevada Revised Statutes Chapter 78 and any successor statute
thereto, as either of them may from time to time be
amended.
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“ Person ” means
any individual, entity or group (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act).
“ Potential Change in
Control ” shall be deemed to have occurred if
(i) any Person shall have announced publicly an intention to
effect a Change in Control, or commenced any action (such as the
commencement of a tender offer for the Company’s Common Stock
or the solicitation of proxies for the election of any of the
Company’s directors) that, if successful, could reasonably be
expected to result in the occurrence of a Change in Control;
(ii) the Company enters into an agreement, the consummation of
which would constitute a Change in Control; or (iii) any other
event occurs that the Board declares to be a Potential Change in
Control.
“ Proceeding ”
means any threatened, pending or completed action, suit,
arbitration, investigation, inquiry, alternate dispute resolution
mechanism, administrative or legislative hearing, or any other
proceeding (including, without limitation, any securities laws
action, suit, arbitration, alternative dispute resolution
mechanism, hearing or procedure) whether civil, criminal,
administrative, arbitrative or investigative and whether or not
based upon events occurring, or actions taken, before the date
hereof, and any appeal in or related to any such action, suit,
arbitration, investigation, hearing or proceeding and any inquiry
or investigation (including discovery), whether conducted by or in
the right of the Company or any other Person, that Indemnitee in
good faith believes could lead to any appeal in or related to, any
such action, suit, arbitration, alternative dispute resolution
mechanism, hearing or other proceeding.
“ Subsidiary ”
means, with respect to any Person, any corporation or other entity
of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by
that Person.
“ Voting Securities
” means any securities that vote generally in the election of
directors, in the admission of general partners, or in the
selection of any other similar governing body.
ARTICLE II
Services by
Indemnitee
Indemnitee is serving as a [director
and/or an officer] of the Company. Indemnitee may from time
to time also agree to serve, as the Company may request from time
to time, in another capacity for the Company (including another
officer or director position) or, as the Company may request from
time to time, as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise. Indemnitee and the Company
each acknowledge that they have entered into this Agreement as a
means of inducing Indemnitee to serve, or continue to serve, the
Company in such capacities. Indemnitee may at any time and
for any reason resign from such position or positions (subject to
any other contractual obligation or any obligation imposed by
operation of law). The Company shall have no obligation under
this Agreement to continue Indemnitee in any such position or
positions.
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ARTICLE III
Indemnification
Section 3.1
General . Subject to the provisions set forth in
Article IV, the Company shall indemnify, and advance Expenses
to, Indemnitee to the fullest extent permitted by applicable law in
effect on the date hereof and to such greater extent as the NRS or
any other applicable law may thereafter from time to time permit or
authorize. The other provisions set forth in this Agreement
are provided in addition to and as a means of furtherance and
implementation of, and not in limitation of, the obligations
expressed in this Article III. No requirement, condition
to or limitation of any right to indemnification or to advancement
of Expenses under this Article III shall in any way limit the
rights of Indemnitee under Article VII.
Section 3.2
Additional Indemnity of the
Company .
Indemnitee shall be entitled to indemnification pursuant to this
Section 3.2 if, by reason of anything done or not done by
Indemnitee in, or by reason of any event or occurrence related to,
Indemnitee’s Corporate Status, Indemnitee is, was or becomes,
or is threatened to be made, a party to, or witness or other
participant in any Proceeding. Pursuant to this
Section 3.2, Indemnitee shall be indemnified against any and
all Expenses, judgments, penalties (including excise or similar
taxes), fines and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in
connection with or in respect of any such Expenses, judgments,
penalties, fines and amounts paid in settlement) actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with such Proceeding or any Claim, issue or matter
therein. Notwithstanding the foregoing, the obligations of
the Company under this Section 3.2 shall be subject to the
condition that no determination (which, in any case in which
Independent Counsel is involved, shall be in a form of a written
opinion) shall have been made pursuant to Article IV that
Indemnitee would not be permitted to be indemnified under
applicable law. Nothing in this Section 3.2 shall limit the
benefits of Section 3.1 or any other
Section hereunder.
Section 3.3
Advancement of
Expenses . The
Company shall pay all reasonable Expenses incurred by, or in the
case of retainers to be incurred by, or on behalf of Indemnitee
(or, if applicable, reimburse Indemnitee for any and all Expenses
reasonably incurred by Indemnitee and previously paid by
Indemnitee) in connection with any Claim or Proceeding, whether
brought by the Company or otherwise, in advance of any
determination respecting entitlement to indemnification pursuant to
Article IV hereof within 10 days after the receipt by the
Company of (a) a written request from Indemnitee requesting
such payment or payments from time to time, whether prior to or
after final disposition of such Proceeding, and (b) a written
affirmation from Indemnitee of Indemnitee’s good faith belief
that Indemnitee has met the standard of conduct necessary for
Indemnitee to be permitted to be indemnified under applicable
law. Such statement or statements shall reasonably evidence
the Expenses incurred, or in the case of retainers, to be incurred,
by Indemnitee. Any such payment by the Company is referred to
in this Agreement as an “Expense Advance.” In
connection with any request for an Expense Advance, if requested by
the Company, Indemnitee or Indemnitee’s counsel shall also
submit an affidavit stating that the Expenses incurred were, or in
the case of retainers to be incurred, are, reasonable. Any
dispute as to the reasonableness of any Expense shall not delay an
Expense Advance by the Company, and the Company agrees that any
such dispute shall be resolved only upon the disposition or
conclusion of the underlying Claim against Indemnitee.
Indemnitee
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hereby undertakes and agrees (which agreement
shall be an unsecured obligation of Indemnitee) that Indemnitee
will reimburse and repay the Company without interest for any
Expense Advance to the extent that it shall ultimately be
determined (in a final adjudication by a court from which there is
no further right of appeal or in a final adjudication of an
arbitration pursuant to Section 5.1 if Indemnitee elects to
seek such arbitration) that Indemnitee is not entitled to be
indemnified by the Company against such Expenses. Indemnitee
shall be entitled to engage counsel of his or her choice in
connection with the defense of any Claim or Proceeding or otherwise
in connection herewith.
Section 3.4
Indemnification for Additional
Expenses . The
Company shall indemnify Indemnitee against any and all costs and
expenses (of the types described in the definition of Expenses in
Article I) and, if requested by Indemnitee, shall (within two
business days of that request) advance those costs and expenses to
Indemnitee, that are incurred by Indemnitee in connection with any
claim asserted against, or action brought by, Indemnitee for
(i) indemnification or an Expense Advance by the Company under
this Agreement or any other agreement or provision of the
Company’s Articles of Incorporation or Bylaws now or
hereafter in effect relating to any Claim or Proceeding,
(ii) recovery under any directors’ and officers’
liability insurance policies maintained by the Company, or
(iii) enforcement of, or claims for breaches of, any provision
of this Agreement, in each of the foregoing situations regardless
of whether Indemnitee ultimately is determined to be entitled to
that indemnification, advance expense payment, insurance recovery,
enforcement, or damage claim, as the case may be and regardless of
whether the nature of the proceeding with respect to such matters
is judicial, by arbitration, or otherwise.
Section 3.5
Partial Indemnity
. If Indemnitee is entitled
under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses, judgments, fines,
penalties, and amounts paid in settlement of a Claim or Proceeding
but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Agreement, to the extent that Indemnitee
has been successful on the merits or otherwise in defense of any or
all Claims or Proceedings, or in defense of any issue or matter
therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection
therewith.
ARTICLE IV
Procedure for Determination of
Entitlement
to Indemnification
Section 4.1
Request by Indemnitee
. To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company, as
promptly as practicable under the circumstances, a written request,
including therein or therewith 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. The Secretary or an Assistant
Secretary of the Company shall, promptly upon receipt of such a
request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
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Section 4.2
Determination of
Request . Upon
receipt of the written request by Indemnitee for indemnification
pursuant to the first sentence of Section 4.1 hereof, a
determination, if required by applicable law, with respect to
whether Indemnitee is permitted under applicable law to be
indemnified shall be made in accordance with the terms of
Section 4.5, in the specific case as follows:
(a)
If a Potential Change in Control or
a Change in Control shall have occurred subsequent to the date of
this Agreement, by Independent Counsel (selected in accordance with
Section 4.3) in a written opinion to the Board and Indemnitee,
unless Indemnitee shall request that such determination be made by
the Board, or a committee of the Board, in which case by the person
or persons or in the manner provided for in clause (i) or
(ii) of paragraph (b) below; or
(b)
If a Potential Change in Control or
a Change in Control shall not have occurred subsequent to the date
of this Agreement, (i) by the Board by a majority vote of the
Disinterested Directors even though less than a quorum of the
Board, or (ii) by a majority vote of a committee consisting
solely of two or more Disinterested Directors designated to act in
the matter by a majority vote of all Disinterested Directors even
though less than a quorum of the Board, or (iii) by
Independent Counsel selected by the Board or a committee of the
Board by a vote as set forth in clauses (i) or (ii) of
this paragraph (b), or if such vote is not obtainable or such a
committee cannot be established, by a majority vote of all
directors, or (iv) if Indemnitee and the Company agree, by the
stockholders of the Company in a vote that excludes the shares held
by directors who are not Disinterested Directors.
If it is so determined that Indemnitee is
permitted to be indemnified under applicable law, payment to
Indemnitee shall be made within 10 days after such
determination. Nothing contained in this Agreement shall
require that any determination be made under this Section 4.2
prior to the disposition or conclusion of a Claim or Proceeding
against Indemnitee; provided , however , that Expense
Advances shall continue to be made by the Company pursuant to, and
to the extent required by, the provisions of
Article III. Indemnitee shall cooperate with the person
or persons making such determination with respect to
Indemnitee’s entitlement to indemnification, including
providing to such person upon reasonable advance request any
documentation or information that is not privileged or otherwise
protected from disclosure and that is reasonably available to
Indemnitee and reasonably necessary to such determination.
Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the
person or persons making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification), and the Company shall indemnify
and hold harmless Indemnitee therefrom.
Section 4.3
Independent Counsel
. If a Potential Change in
Control or a Change in Control shall not have occurred and the
determination of entitlement to indemnification is to be made by
Independent Counsel, the Independent Counsel shall be selected
pursuant to Section 4.2(b)(iii), and the Company shall give
written notice to Indemnitee, within 10 days after receipt by the
Company of Indemnitee’s request for indemnification,
specifying the identity and address of the Independent Counsel so
selected. If a Potential Change in Control or a Change in
Control shall have occurred and the determination of entitlement to
indemnification is to be made by Independent Counsel, the
Independent Counsel shall be selected by Indemnitee, and
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Indemnitee shall give written notice to the
Company, within 10 days after submission of Indemnitee’s
request for indemnification, specifying the identity and address of
the Independent Counsel so selected (unless Indemnitee shall
request that such selection be made by the Disinterested Directors
or a committee of the Board, in which event the Company shall give
written notice to Indemnitee within 10 days after receipt of
Indemnitee’s request for the Board or a committee of the
Disinterested Directors to make such selection, specifying the
identity and address of the Independent Counsel so selected).
In either event, (i) such notice to Indemnitee or the Company,
as the case may be, shall be accompanied by a written affirmation
of the Independent Counsel so selected that it satisfies the
requirements of the definition of “Independent Counsel”
in Article I and that it agrees to serve in such capacity and
(ii) Indemnitee or the Company, as the case may be, may,
within seven days after such written notice of selection shall have
been given, deliver to the Company or to Indemnitee, as the case
may be, a written objection to such selection. Any objection
to selection of Independent Counsel pursuant to this
Section 4.3 may be asserted only on the ground that the
Independent Counsel so selected does not
