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Exhibit
99.1
INDEMNIFICATION
AGREEMENT
This Indemnification
Agreement (this “ Agreement ”) is made as
of this th day of
, 2007, by and between Dominion Homes, Inc., an Ohio corporation
(the “ Company ”), and
, an individual (“ Indemnitee
”).
Recitals
A. The regulations (the
“ Regulations ”) of the Company provide
for the indemnification of the directors and officers of the
Company as set forth therein.
B. The Regulations and Ohio
General Corporation Law, as amended (the “ OGCL
”) permit contracts between the Company and the directors and
officers of the Company with respect to indemnification of such
directors and officers.
C. In accordance with the
Regulations and the OGCL, the Company may purchase and maintain a
policy or policies of directors’ and officers’
liability insurance covering certain liabilities that may be
incurred by its directors and officers in the performance of their
obligations to the Company.
D. The Company recognizes
that capable and qualified individuals are becoming increasingly
reluctant to serve as directors and/or officers of public
corporations as a result of the recent and ongoing enactment of
statutes and regulations pertaining to directors’ and
officers’ responsibilities and the increasing risk of
lawsuits against directors and officers in the current corporate
climate in the United States, unless such individuals are provided
with more certain and secure protection against exposure to
unreasonable personal risk arising from their service and
activities on behalf of a corporation.
E. The Company believes that
individuals recruited to serve on the boards of public corporations
and as officers of public corporations generally are more likely to
agree to provide services to corporations that provide for separate
indemnification agreements with their directors and officers
because, unlike indemnification provisions contained in the
articles of incorporation or the regulations of a company or state
statutory provisions, the indemnification provisions contained in a
separate agreement may not be amended or rescinded without the
consent of the director or officer who is a party to the
agreement.
F. The Company recognizes
that it is in the best interests of the Company and its
shareholders to attract and retain capable and qualified
individuals to serve on its Board of Directors (the “
Board ”) and to serve as management of the
Company and to enable such directors and officers to exercise their
independent business judgment in their capacities as directors and
officers without being affected by the threat of exposure to
unreasonable personal risk.
G. To induce Indemnitee to
serve and/or continue to serve as a director and/or officer of the
Company, the Company desires Indemnitee to be indemnified and
advanced expenses as set forth herein.
Agreement
In consideration of
Indemnitee’s service as a director and/or officer of the
Company after the date hereof, the Company and Indemnitee hereby
agree as follows:
1. Certain
Definitions . Capitalized terms used but not otherwise
defined in this Agreement shall have the meanings set forth
below:
“ Change in
Control ” shall be deemed to have occurred if, other
than as approved by a majority of the Board in office immediately
prior to such event, any of the following events occur:
(a) Any person, other than
(i) the Company, (ii) a trustee or other fiduciary
holding Voting Securities (defined below) under an employee benefit
plan of the Company, or (iii) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or
becomes the “Beneficial Owner” (as defined in Rule
13d-3 under the Exchange Act (defined below) but excluding any
person otherwise becoming a Beneficial Owner by reason of the
shareholders of the Company approving a merger of the Company with
another entity) of Voting Securities representing 15% or more of
the total voting power represented by the Company’s then
outstanding Voting Securities; or
(b) During any period of two
(2) consecutive years, individuals who at the beginning of
such period constituted the Board and any new directors whose
election by the Board or nomination for election by the
Company’s shareholders 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
(c) The shareholders of the
Company approve (i) a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation
which would result in the Voting Securities 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 the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (ii) a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company
(in one transaction or a series of transaction) of all or
substantially all of the Company’s assets; or
(d) There occurs any other
event of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A (or a response
to any similar item or any similar schedule or form) promulgated
under the Exchange Act, whether or not the Company is then subject
to such reporting requirement.
“ Corporate
Status ” means the fact that a person is or was a
director, officer, employee, or agent of the Company or is or was
serving at the request of the Company as a director, trustee,
officer, employee, agent, fiduciary, partner, member, or manager of
another corporation, limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise. A
Proceeding (defined below) shall be deemed to have been brought by
reason of a person’s “Corporate Status” if it is
brought because of the status described in the preceding sentence
or because of any action or inaction on the part of such person in
connection with such status.
“ Disinterested
Director ” means a director of the Company who is not
and was not a party to or threatened with a Proceeding in respect
of which indemnification is sought by Indemnitee.
“ Exchange
Act ” means the Securities Exchange Act of 1934, as
amended.
“
Expenses ” shall include all reasonable
attorneys’ fees, disbursements and retainers, court costs,
transcript costs, fees of experts, witness fees, travel and
deposition costs, duplicating
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costs, printing and binding
costs, telephone charges, postage, delivery service fees and all
other disbursements or expenses of the types customarily incurred
in connection with (a) prosecuting, defending, preparing to
prosecute or defend, investigating, settling or appealing a
Proceeding (including the cost of any appeal bond or its
equivalent), (b) being prepared to be a witness or otherwise
participating in a Proceeding, or (c) enforcing a right under
this Agreement (including any right to indemnification or
advancement of expenses under this Agreement).
“ Independent
Counsel ” means an attorney, or a firm having
associated with it an attorney, who neither currently is nor in the
past five (5) years has been retained by or performed services
for the Company or any person to be indemnified by the
Company.
“ Potential
Change in Control ” shall be deemed to have occurred
if (a) the Company enters into an agreement or arrangement the
consummation of which would result in the occurrence of a Change in
Control, (b) any person (including the Company) publicly
announces an intention to take or consider taking action which if
consummated would constitute a Change in Control, or (c) the
Board adopts a resolution to the effect that, for the purposes of
this Agreement, a Potential Change in Control has
occurred.
“
Proceeding ” includes any threatened, pending
or completed action, suit, arbitration or other alternative dispute
resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding,
whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or would be involved as a party or otherwise
(including, without limitation, as a witness) by reason of the
Indemnitee’s Corporate Status, including one pending on or
before the date of this Agreement, but excluding (a) one
initiated by Indemnitee pursuant to Section 8 of this
Agreement to enforce Indemnitee’s rights under this Agreement
unless such action follows a Change in Control, and (b) one in
which the only liability asserted is pursuant to
Section 1701.95 of the OGCL. For purposes of this definition,
the term “threatened” shall be deemed to include, but
not be limited to, Indemnitee’s good faith belief that a
claim or other assertion may lead to initiation of a
Proceeding.
“ Reviewing
Party ” means the person, persons or entity selected
to make the determination of the entitlement to indemnification
pursuant to Section 5.3 hereof.
“ Trust
” has the meaning set forth in Section 12.2.
“ Voting
Securities ” means any securities of the Company
which vote generally in the election of directors.
2.
Indemnification .
2.1 Proceedings not by
or in Right of Company . The Company hereby agrees to hold
harmless and indemnify Indemnitee to the greatest extent permitted
by Ohio law, including but not limited to the provisions of the
OGCL, and the Regulations, as such may be amended from time to
time, if Indemnitee was or is a party, witness, or other
participant, or is threatened to be made a party, witness, or other
participant, to any Proceeding, other than a Proceeding by or in
the right of the Company, by reason of Indemnitee’s Corporate
Status, against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with such Proceeding, if
Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company and, with respect to any criminal Proceeding, had no
reasonable cause to believe that his or her conduct was unlawful.
The termination of any Proceeding by judgment, order,
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settlement or conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that Indemnitee did not satisfy the
foregoing standard of conduct to the extent applicable
thereto.
2.2 Proceedings by or
in Right of Company . The Company hereby agrees to hold
harmless and indemnify Indemnitee to the greatest extent permitted
by Ohio law, including but not limited to the provisions of the
OGCL, and the Regulations, as such may be amended from time to
time, if Indemnitee was or is a party or is threatened to be made a
party to any Proceeding by or in the right of the Company, by
reason of Indemnitee’s Corporate Status, against all Expenses
actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with the defense or
settlement of such Proceeding, if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company; provided, however,
that, if applicable law so provides, no indemnification against
such Expenses shall be paid in respect of (a) any claim, issue
or matter in such Proceeding by or in the right of the Company as
to which the Indemnitee shall have been adjudged to be liable to
the Company for an act or omission undertaken by such Indemnitee in
his or her capacity as a director of the Company with deliberate
intent to cause injury to the Company or with reckless disregard
for the best interests of the Company, (b) any claim, issue or
matter asserted in a Proceeding by or in the right of the Company
as to which the Indemnitee shall have been adjudged to be liable to
the Company for negligence or misconduct in his or her capacity
other than that of a director of the Company, or (c) any
Proceeding by or in the right of the Company in which the only
liability is asserted pursuant to Section 1701.95 of the OGCL
against the Indemnitee, unless and only to the extent that the
Franklin County Court of Common Pleas of the State of Ohio or the
court of competent jurisdiction in which such Proceeding is brought
shall determine, upon application of either the Indemnitee or the
Company, that, despite the adjudication or assertion of such
liability, and in view of all the circumstances of the case, the
Indemnitee is fairly and reasonably entitled to such indemnity as
such court shall deem proper.
2.3 Indemnification for
Expenses of an Indemnitee who is Wholly or Partly
Successful . To the extent that the Indemnitee has
been successful on the merits or otherwise in defense of any
Proceeding referred to in Sections 2.1 or 2.2 of this
Agreement, or in defense of any claim, issue or matter in such
Proceeding, Indemnitee shall be indemnified against Expenses
actually and reasonably incurred by the Indemnitee or on
Indemnitee’s behalf in connection with such
Proceeding.
3. Advancement of
Expenses .
3.1 Pre-Disposition
Advancement . The Company shall advance all Expenses
incurred by or on behalf of Indemnitee in connection with any
Proceeding prior to the final disposition of such Proceeding upon
receipt of an undertaking by or on behalf of Indemnitee to repay
such amount if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company. Any advances and
undertakings to repay pursuant to this Section 3.1
shall not be secured, shall not bear interest and shall provide
that, if Indemnitee has commenced or thereafter commences legal
proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under
applicable law with respect to such Proceeding, Indemnitee shall
not be required to reimburse the Company for any advancement of
Expenses in respect of such Proceeding until a final judicial
determination is made with respect thereto (as to which all rights
of appeal therefrom have been exhausted or lapsed).
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3.2 Request for
Advancement . Any advancement of Expenses pursuant to
Section 3.1 hereof shall be made within ten
(10) days after the receipt by the Company of a written
statement from Indemnitee requesting such advancement from time to
time and accompanied by or preceded by the undertaking referred to
in Section 3.1 above. Each statement requesting
advancement shall reasonably evidence the Expenses incurred by or
on behalf of the Indemnitee in connection with such Proceeding for
which advancement is being sought.
4. Contribution in the
Event of Joint Liability . Whether or not the
indemnification provided in this Agreement is available, in respect
of any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding), the Company
shall contribute, to the fullest extent permitted by law, to the
amount of Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred and paid or payable by Indemnitee
in proportion to the relative benefits received by the Company, on
the one hand, and Indemnitee, on the other hand, from the
transaction from which such Proceeding arose; provided, however,
that the proportion determined on the basis of relative benefit
may, to the extent necessary to conform to law, be further adjusted
by reference to the relative fault of the Company, on the one hand,
and Indemnitee, on the other hand, in connection with the events
that resulted in such Expenses, judgments, fines or settlement
amounts, as well as any other equitable considerations that
applicable law may require to be considered. For the purposes of
this Section 4 , the relative benefit of the Company
shall be deemed to be the benefit accruing to it and to all of its
directors, officers, employees and other agents (other than
Indemnitee) on the one hand, as a group and treated as one entity,
and the relative benefit of Indemnitee shall be deemed to be an
amount not greater than the Indemnitee’s yearly base salary
or Indemnitee’s compensation from the Company during the
years in which the events forming the basis of the Proceeding are
alleged to have occurred. To the fullest extent permitted by law,
the relative fault of the Company, on the one hand, and Indemnitee,
on the other hand, shall be determined by reference to, among other
things, the degree to which their actions were motivated by intent
to gain personal profit or advantage, the degree to which their
liability is primary or secondary, and the degree to which their
conduct is active or passive.
5. Procedures and
Presumptions for Determination of Entitlement to
Indemnification .
5.1 Timing of
Payments . All payments of Expenses, judgments, fines,
amounts paid in settlement and other amounts by the Company to
Indemnitee pursuant to this Agreement shall be made as soon as
practicable after written demand therefor by Indemnitee is
presented to the Company, but in no event later than
(a) thirty (30) days after such demand is presented or
(b) such later date as may be permitted for the determination
of entitlement to indemnification pursuant to
Section 5.7 hereof, if applicable; provided, however,
that advances of Expenses shall be made within the time period
provided in Section 3.2 hereof.
5.2 Request for
Indemnification . Whenever Indemnitee believes that he or
she is entitled to indemnification pursuant to this Agreement,
Indemnitee shall submit to the Company 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. Indemnitee shall submit such claim for
Indemnification within a reasonable time, not to exceed five
(5) years, after any judgment, order, settlement, dismissal,
arbitration award, conviction, acceptance of a plea of nolo
contendere (or its equivalent) or other full or partial final
determination or disposition of the Proceeding (with the latest
date of the occurrence of any such event to be considered the
commencement of the five-year period). The 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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5.3 Reviewing
Party . Unless ordered by a court, upon written request by
Indemnitee for indemnification pursuant to the first sentence of
Section 5.2 hereof, to the extent that the
Indemnitee’s entitlement to such indemnification is governed
by Sections 2.1 or 2.2 of this Agreement, a
determination with respect to Indemnitee’s entitlement
thereto shall be made in the specific case as follows: (a) if
a Change of Control shall have occurred, as provided in
Section 12.1 ; and (b) if a Change of Control
shall not have occurred, by one of the following methods:
(i) by a majority vote of a quorum of the Board consisting of
Disinterested Directors; 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 Counsel
(designated for such purpose by the Board).
5.4 Determination by
Independent Counsel . If the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to
Section 5.3 hereof, the Independent Counsel shall be
selected as provided in this Section 5.4 . The
Independent Counsel shall be selected by the Board of Directors,
and the Company shall promptly give written notice to Indemnitee
advising him or her of the identity of the Independent Counsel so
selected. Indemnitee may, within ten (10) days after such
written notice of selection shall have been given, deliver to the
Company a written objection to such selection; provided, however,
that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of
“Independent Counsel” as defined in this Agreement, and
the objection shall set forth with particularity the factual basis
of such assertion. Absent a proper and timely objection, the person
so selected shall act as Independent Counsel. If a written
objection is made and substantiated, the Independent Counsel
selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court has ruled against such objection.
If, within thirty (30) days after submission by Indemnitee of
a written request for indemnification pursuant to
Section 5.2 hereof, no Independent Counsel shall have
bee
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