EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
This Indemnification
Agreement (“Agreement”) is made as of the 26
th day of October 2006 by and between THE MIDLAND
COMPANY, an Ohio corporation (the “Corporation”), and
the individual whose name appears on the signature page hereof
(such individual being referred to herein as the “Indemnified
Representative” and collectively with other individuals who
may execute substantially similar agreements as the
“Indemnified Representatives”), with reference to the
following background:
A. The Indemnified
Representative currently is serving as a director of the
Corporation, and may also be serving as, or may have previously
served as, an officer of the Corporation, and in such capacity or
capacities, is rendering or has rendered a valuable service to the
Corporation.
B. Directors and
officers of corporations are being increasingly subjected to
expensive and time-consuming litigation and other Proceedings (as
hereafter defined), including matters that traditionally would have
been brought only against such corporations or their subsidiaries.
The Indemnified Representative has been offered the protection
afforded by this Agreement from such Proceedings.
C. In recognition
of the valuable services provided by the Indemnified
Representative, to induce the Indemnified Representative to
continue to serve the Corporation and in consideration for such
continued service, and to assist in the recruitment of qualified
Directors in the future, the Corporation agrees to indemnify as
provided in Paragraph 2, and to advance expenses as provided in
Paragraph 4, to the Indemnified Representative upon the terms set
forth herein. The pledge to indemnify and to advance expenses shall
be hereinafter collectively referred to as the “Pledge of
Indemnity”.
NOW, THEREFORE, in
consideration of the foregoing premises, the Corporation and the
Indemnified Representative agree as follows:
1. Agreement to
Serve . In consideration of the Corporation’s Pledge of
Indemnity, the Indemnified Representative agrees to serve or to
continue to serve in the Indemnified Capacity now or in the future;
provided, however, that this Agreement shall not be deemed either
an employment contract or a commitment to continue to provide
services for a defined period. It is expressly understood that the
Pledge of Indemnity shall survive the voluntary or involuntary
termination of the Indemnified Representative’s service in an
Indemnified Capacity.
(a) Except as
provided in Section 3, the Corporation shall indemnify the
Indemnified Representative against any Liability (as hereafter
defined) incurred by the Indemnified Representative in connection
with any Proceeding (as hereafter defined) in which the Indemnified
Representative may be involved as a party or otherwise, by reason
of the fact that the Indemnified Representative is or was serving
in an Indemnified Capacity (as hereafter defined), including,
without limitation, any Liability resulting from actual or alleged
breach or neglect of duty, error, misstatement or
misleading statement, gross negligence,
negligence, omission, act or failure to act or act giving rise to
strict or products liability, occurring any time during the
Indemnified Representative’s service in an Indemnified
Capacity. If the Indemnified Representative is entitled to
indemnification in respect of a portion, but not all, of any
Liability, the Corporation shall indemnify the Indemnified
Representative to the maximum extent for such portion of any
Liability, with all uncertainties being resolved in favor of
broader indemnification.
(b) Notwithstanding
the provisions of subsection (a), the Corporation shall not
indemnify the Indemnified Representative under this Agreement for
any Liability incurred in a Proceeding initiated (which shall not
be deemed to include counter-claims or affirmative defenses) or
participated in as an intervenor or amicus
curiae by the Indemnified Representative unless such
initiation of or participation in the Proceeding is authorized,
either before or after commencement of the Proceeding, by the
affirmative vote of a majority of the Board of Directors of the
Corporation in office. This subsection (b) does not apply to
reimbursement of expenses incurred in successfully prosecuting or
defending the rights granted to the Indemnified Representative by
or pursuant to this Agreement.
(c) As used in this
Agreement:
(i)
“Indemnified Capacity” means any and all past, present
or future service by an Indemnified Representative: (A) in one or
more capacities as a director, officer or employee of the
Corporation, or, at the request of the Corporation while serving as
such a director, officer or employee, as a director, officer,
manager, employee, agent, fiduciary or trustee of another
corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan or other entity or enterprise; or (B)
in the capacity of an agent of the Corporation if such capacity is
designated as an “indemnified capacity” for purposes of
this Agreement by the Board of Directors of the Corporation;
(ii)
“Liability” means any damage, judgment, amount paid in
settlement, fine, penalty, punitive damages, cost or expense of any
nature (including, without limitation, attorneys’ fees and
disbursements) in any way associated with the above, excise tax
assessed with respect to an employee benefit plan, excise taxes or
penalties arising under the Employee Retirement Income Security Act
of 1974 (“ERISA”), rules or orders of the Securities
and Exchange Commission or other federal or state acts, rules,
notices, orders or regulations; and
(iii)
“Proceeding” means any threatened, pending or completed
action, suit, appeal, or other proceeding of any nature, whether
civil, criminal, administrative or investigative, whether formal or
informal, and whether brought by or in the right of the
Corporation, a class of its security holders, third parties or
otherwise.
(a) The Corporation
shall not be liable under Section 2 of this Agreement to make any
indemnification payment in connection with any Liability incurred
by the Indemnified Representative and arising from acts or failures
to act in which the Indemnified Representative failed to act in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation or, with respect
to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(b) Any fact, act or
omission pertaining to any other director, officer, employee or
agent of the Corporation shall not be imputed to the Indemnified
Representative hereunder for the purposes of determining the
applicability of any exclusion set forth herein.
(c) The termination
of a proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the Indemnified
Representative is not entitled to indemnification under Section 2
of this Agreement.
(d) The Corporation
shall not be liable under this Agreement to make any payment if the
making of such payment is expressly prohibited by applicable law or
has been finally determined in a final a
