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Exhibit
10.u
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of
between THE TORO COMPANY, a Delaware corporation ("Toro"), and
("Director").
WHEREAS, it is essential to Toro to retain and attract as
directors the most capable persons available;
WHEREAS, Director is a member of the Board of Directors of
Toro;
WHEREAS, both Toro and Director recognize the increased risk of
litigation and other claims being asserted against directors of
public companies in today’s environment;
WHEREAS, basic protection against undue risk of personal
liability of Toro directors heretofore has been provided through
insurance coverage providing reasonable protection at reasonable
cost, and Director has relied on the availability of such
coverage;
WHEREAS, Toro’s Certificate of Incorporation requires Toro
to indemnify and advance expenses to its directors to the full
extent permitted by law, and Director has been serving and
continues to serve as a director of Toro in part in reliance on
such provisions;
WHEREAS, in recognition of Director’s need for substantial
protection against personal liability in order to enhance
Director’s continued service to Toro in an effective
manner, and of Director’s reliance on the aforesaid
provision in Toro’s Certificate of Incorporation, and in part
to provide Director with specific contractual assurance that the
protection promised by such provision will be available to Director
(regardless of, among other things, any amendment to or revocation
of such provision of the Certificate of Incorporation, any change
in the composition of Toro’s Board of Directors or the
occurrence of any acquisition transaction relating to Toro);
and
WHEREAS, Toro wishes to provide in this Agreement for the
effective indemnification of and the advancing of expenses to
Director to the fullest extent (whether partial or complete)
permitted by law and as set forth in this Agreement and, to the
extent insurance is maintained, for the continued coverage of
Director under Toro’s director and officer liability
insurance policies;
NOW THEREFORE, in consideration of the premises and of Director
continuing to serve Toro directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties
hereto agree as follows:
1.
Certain
Definitions:
(a) Change in Control: shall be deemed to have
occurred if (i) during any period of two consecutive calendar
years, individuals who at the beginning of such period constitute
the Board of Directors of Toro and any new director whose election
by the Board of Directors or nomination for election by
Toro’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (ii) the stockholders
of Toro approve a merger or consolidation of Toro with any other
corporation, other than a merger or consolidation which would
result in the Voting Securities of
Toro outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or
by being converted into Voting Securities of the surviving entity)
at least 80% of the total voting power represented by the Voting
Securities of Toro or such surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of Toro
approve a plan of complete liquidation of Toro or an agreement for
the sale or disposition by Toro of all or substantially all of
Toro’s assets; provided, however, that a would-be Change in
Control under Section 1(a)(ii) which is approved by a majority of
the directors on Toro’s Board of Directors who were directors
prior thereto shall not be deemed a Change in Control.
(b) Claim: any threatened, pending or completed
action, suit or proceeding, or any inquiry or investigation,
whether conducted by Toro or any other party, that Director in good
faith believes might lead to the institution of any such action,
suit or proceeding, whether civil, criminal, administrative,
investigative or other.
(c) Expenses: include attorneys’ fees and all
other costs, expenses and obligations paid or incurred in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be
a witness in, or participate in, any Claim relating to any
Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence
related to the fact that Director is or was a director, officer,
employee, agent or fiduciary of Toro, or is or was serving at the
request of Toro as a director, officer, employee, trustee, agent or
fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, or did not do
anything in any such capacity.
(e) Potential Change in Control: shall be deemed to
have occurred if (i) Toro enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control; (ii) any person or entity (including Toro) publicly
announces an intention to take, or to consider taking, actions
which if consummated would constitute a Change in Control; (iii)
any person or entity, other than a trustee or other fiduciary
holding securities under an employee benefit plan of Toro or any of
its subsidiaries, is or becomes the beneficial owner, directly or
indirectly, of securities of Toro representing 15% or more of the
combined voting power of Toro’s then outstanding Voting
Securities or (iv) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control
has occurred.
(f) Reviewing Party: any appropriate person or body
consisting of a member or members of Toro’s Board of
Directors or any other person or body appointed by the Board
(including Special Independent Counsel) who is not a party to the
particular Claim for which Director is seeking
indemnification. If there has not been a Change in Control,
the Reviewing Party shall be selected by Toro’s Board of
Directors. If there has been such a Change in Control, the
Reviewing Party shall be Special Independent Counsel.
(g) Special Independent Counsel: counsel selected by
Director and approved by Toro (which approval shall not be
unreasonably withheld) and who has not, unless waived by Toro and
Director, otherwise performed services for (i) Toro or Director
within the last ten (10) years or (ii) any other party to a
proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Special
Independent Counsel" shall not include any person who under the
applicable standards of professional conduct then prevailing, would
have a
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conflict of interest in representing
either Toro or Director in an action to determine Director’s
rights under this Agreement.
(h) Voting Securities: any securities of Toro which
have the right to vote generally in the election of directors.
2.
Basic Indemnification
Arrangement.
(a) In the event Director was, is or becomes a party to or
witness or other participant in, or is threatened to be made a
party to or witness or other participant in, a Claim by reason of
(or arising in part out of) an Indemnifiable Event, Toro shall
indemnify Director to the fullest extent permitted by law as soon
as practicable but in any event not later than thirty days after
written demand is presented to Toro, against any and all Expenses,
judgments, fines, penalties and amounts paid or owing with respect
to or in settlement of (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such Expenses, judgments, fines, penalties or amounts) such
Claim. Director shall give Toro written notice of all such
Claims and the particulars thereof as soon as practicable;
provided, however, that the failure to give such notice shall not
affect the right of Director to indemnity hereunder unless such
failure has materially and adversely affected the rights of
Toro.
(b) If so requested by Director, Toro shall advance
(within ten business days of such request) any and all Expenses,
judgments, fines, penalties and amounts paid or owing with respect
to or in settlement of any Claim to Director (an "Expense
Advance").
(c) Notwithstanding anything in this Agreement to the
contrary, (i) prior to a Change in Control, Director shall
not be entitled to indemnification pursuant to this Agreement in
connection with any Claim (other than a claim for indemnification)
initiated by Director against Toro or any director or officer of
Toro unless Toro has joined in or consented to the initiation of
such Claim, (ii) the obligations of Toro under Section 2(a) shall
be subject to the condition that the Reviewing Party shall not have
determined in a writing stating the reasons therefor that Director
would not be permitted to be indemnified under applicable law, and
(iii) the obligation of Toro to make an Expense Advance pursuant to
Section 2(b) shall be subject to the condition that, if, when and
to the extent the Reviewing Party determines that Director would
not be permitted to be indemnified under applicable law, Toro shall
be entitled to be reimbursed by Director (who hereby agrees to
reimburse Toro) for all such amounts theretofore paid; provided,
however, that if Director has commenced legal proceedings in a
court of competent jurisdiction to secure a determination that
Director should be indemnified under applicable law, any
determination made by the Reviewing Part
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