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EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
(Chase Packaging Corporation)
THIS
AGREEMENT is made to be effective the 23
rd day
of August, 2007, between
Chase Packaging Corporation a
Texas corporation (the “
Company ”),
and_______________________ (“
Indemnitee ”).
Competent
and experienced persons are becoming more reluctant to serve
as directors and/or officers of corporations unless they are
provided with adequate protection against claims and actions
against them for their activities on behalf, or at the
request, of such corporations, generally through insurance
and/or indemnification.
Uncertainties
in the interpretations of the statutes and regulations, laws,
and public policies relating to indemnification of corporate
directors and officers are such as to make difficult adequate
and reliable assessment of the risks to which directors and
officers of such corporations may be exposed difficult,
particularly in light of the proliferation of lawsuits against
directors and officers generally.
The
Board of Directors of the Company, based upon its business
experience, has concluded that the continuation of present
trends in litigation against corporate directors and officers
will inevitably make it more difficult for the Company to
attract and retain directors and officers of the highest
degree of competence committed to the active and effective
direction and supervision of the business and affairs of the
Company and its subsidiaries and affiliates and the operation
of its and their facilities. In fact, the Board deems such
potential adverse consequences to be so detrimental to the
best interests of the Company that it has concluded that the
Company should act to provide its directors and officers with
enhanced protection against inordinate risks attendant on
their positions in order to assure that the most capable
persons otherwise available will be attracted to, or will
remain in, such positions. In that regard, such directors have
further concluded that it is not only reasonable and prudent,
but necessary, for the Company to obligate itself
contractually to indemnify, to the fullest extent permitted by
applicable law, expenses and liabilities which might be
incurred by such individuals in connection with claims lodged
against them for their decisions and actions in such
capacities.
Article
2.02-1 of the Texas Business Corporation Act of the State of
Texas, under which law the Company is organized, empowers a
corporation organized in Texas to indemnify persons who serve
as directors and/or officers of the corporation, or persons
who serve at the request of the corporation as directors
and/or officers of an affiliated corporation, and further
empowers a corporation to
“purchase and maintain insurance”
on
behalf of any such person
“against any liability asserted against him and incurred by
him in such a capacity or arising out of his status as such a
person, whether or not the corporation would have the power to
indemnify him against that liability under this
[Article].”
The
Articles of Incorporation and Bylaws of the Company permit
indemnification to the fullest extent permitted by applicable
law.
The
Company is aware of the fact that it currently does not have,
but from time to time in the future may have, directors and
officers insurance coverage. The Company is also aware of the
fact that any future insurance policies are likely to have
significant exclusions and limitations that leave the insureds
personally exposed.
The
Company desires to have the Indemnitee serve or continue to
serve as a director and/or officer of the Company, and/or as a
director, officer, employee, partner, trustee, agent, and/or
fiduciary of such other corporations, partnerships, joint
ventures, employee benefit plans, trusts, and/or other
enterprises (herein referred to as “Company
Affiliate”) of which he has been or is serving, or will
serve on behalf of or at the request of or for the convenience
of, or to represent the interests of the Company, free from
undue concern for unpredictable, inappropriate, or
unreasonable claims for damages by reason of his being, or
having been, a director and/or officer of the Company, and/or
a director, officer, employee, partner, trustee, agent, and/or
fiduciary of a Company Affiliate, or by reason of his
decisions or actions on their behalf.
The
Indemnitee is willing to serve, or to continue to serve, or to
take on additional service for, the Company and/or the Company
Affiliate in such aforesaid capacities on the condition that
he be indemnified as provided for herein.
Accordingly,
in consideration of the premises and the covenants contained
herein, the Company and the Indemnitee do hereby covenant and
agree as follows:
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1
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Services to the Company :
The Indemnitee shall serve or continue to serve as a director
and/or officer of the Company (in the case of a Company officer at
the will of the Company or under separate contract, if any such
contract exists or shall hereafter exist), and/or as a director,
and/or officer, or fiduciary of a Company Affiliate, faithfully and
to the best of his ability so long as he is duly elected and
qualified in accordance with the provisions of the Bylaws or other
applicable constitutive documents thereof; provided, however that:
(a) the Indemnitee may at any time and for any reason resign from
such position (subject to any contractual obligations which the
Indemnitee has assumed apart from this Agreement); and (b) neither
the Company nor the Company Affiliate will have any obligation
under this Agreement to continue the Indemnitee in any such
position.
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2
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Right to Indemnification :
The Company shall, except to the extent prohibited by applicable
law as then in effect, indemnify any Indemnitee who is or was
involved in any manner (including, without limitation, as a party
or witness), or is threatened to be made so involved, in any
threatened, pending, or completed investigation, claim, action,
suit, or proceeding whether civil, criminal, administrative, or
investigative (including, without limitation, any action, suit, or
proceeding by or in the right of the Company to procure a judgment
in its favor) (herein referred to as a “
Proceeding ”)
by reason of the fact that such person is or
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was
a director or officer of the Company, and/or is or was serving
at the request of the Company as a director or officer of any
Company affiliate, against all expenses (including
attorneys’ fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such Proceeding;
provided, however, that
(except as provided in Paragraph 3.4) the foregoing shall not apply
to a director or officer of the Company with respect to a
Proceeding that was commenced by such director or officer. Such
indemnification shall include the right to receive payment in
advance of any expenses incurred by the Indemnitee in connection
with such Proceeding, consistent with the provisions of applicable
law as then in effect.
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Advancement of Expenses; Procedures; Presumptions, and Effect of
Certain Proceedings; Remedies :
In furtherance, but not in limitation, of the foregoing provisions,
the following procedures, presumptions, and remedies shall apply
with respect to advancement of expenses and the right to
indemnification hereunder:
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3.1
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Advancement of Expenses :
All reasonable expenses incurred by or on behalf of the Indemnitee
in connection with any Proceeding shall, after initial approval in
accordance with Paragraph 3.2, be advanced to the Indemnitee by the
Company within twenty (20) calendar days after the receipt by the
Company of a statement or statements from the Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the expenses incurred by the
Indemnitee and, if required by law at the time of such advance,
shall include or be accompanied by an undertaking by or on behalf
of the Indemnitee to repay the amounts advanced if it should
ultimately be determined that the Indemnitee is not entitled to be
indemnified against such expenses hereunder.
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3.2 |
Procurement for Determination of Entitlement to
Indemnification :
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3.2.1
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To
obtain indemnification as herein provided, an Indemnitee shall
submit to the President or Secretary of the Company a written
request, including such documentation and information as is
reasonably available to the Indemnitee and reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification (herein referred to as the “
Supporting Documentation ”).
The determination of the Indemnitee’s entitlement to
indemnification shall be made not later than forty-five (45)
calendar days after receipt by the Company of the written request
for Indemnification together with the Supporting Documentation. The
Secretary or President of the Company shall, promptly upon receipt
of such a request for indemnification, advise the Board of
Directors in writing that the Indemnitee has requested
indemnification.
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3.2.2
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The
Indemnitee’s entitlement to indemnification hereunder shall
(except as provided in Subparagraph 3.2.3 below) be determined in
one of the following ways (each of which shall give effect to the
presumptions set forth in Paragraph 3.3): (a) by a majority vote of
the Disinterested Directors (as hereinafter defined) if they
constitute a quorum of the Board of Directors; (b) by a written
opinion of Independent Counsel (as hereinafter defined) if a quorum
of the Board of Directors consisting of Disinterested Directors is
not obtainable or, even if obtainable, a majority of such
Disinterested Directors so directs: (c) by the stockholders of the
Company (but only if a majority of the Disinterested Directors, if
they constitute a quorum of the Board of Directors, presents the
issue of entitlement to indemnification to the stockholders for
their determination); or (d) as provided in Paragraph 3.3. In the
event that this Subparagraph 3.2.2 applies, stockholder approval
will be deemed to have been received if the holders of a majority
of the Company’s total common stock outstanding vote in favor
of such approval.
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3.2.3
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Notwithstanding
what is stated above, in the event of a Change in Control (as
hereinafter defined) the Indemnitee’s entitlement to
indemnification shall be determined by a written opinion of
Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to the Indemnitee. The
Independent Counsel shall be selected by the Indemnitee. In the
event the Company objects to the Independent Counsel so selected,
within seven days after written notice of the selection has been
given by the Indemnitee to the Company, the Company may object to
such selection by written notification given to the Indemnitee.
Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirement of
“
Independent Counsel ”
as hereafter defined, and the objection shall set forth with
particularity the factual basis of such assertion. If such written
objection is made, the Independent Counsel so selected may not
serve as Independent Counsel unless and until a court has
determined that such objection is without merit. The Company shall
pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with the
performance of his responsibilities hereunder, and the Company
shall pay all reasonable fees and expenses instant to the
implementation of the procedures referred to above. Upon the due
commencement of any judicial proceeding or arbitration pursuant to
Subparagraph 3.4.1 hereof, the Independent Counsel shall be
discharged and relieved of any
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further
responsibility in such capacity (subject to the
ap
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