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Exhibit 10.5
INDEMNIFICATION AGREEMENT
AGREEMENT made and entered as of the ___ day of
__________, 20__, by and between Todd Shipyards Corporation a
Delaware corporation (the "Company"), and ______________ (the
"Indemnitee").
WHEREAS , Indemnitee is a director or
officer of the Company; and
WHEREAS , the Bylaws of the Company
permit the Company to indemnify and advance expenses to its
directors and officers to the fullest extent now or hereafter
authorized or permitted by law and authorize the Company to enter
into agreements providing for such indemnification and advancement
of expenses; and
WHEREAS , in recognition of Indemnitee's
need for protection against personal liability, in order to enhance
Indemnitee's continued service to the Company in an effective
manner, and to provide Indemnitee with specific contractual
assurance that the protection promised by the Company's Bylaws will
be available to Indemnitee (regardless of changes to the Bylaws or
the composition of the Company's Board of Directors), the Company
wishes to provide in this Agreement for the indemnification of, and
the advancing of expenses to, Indemnitee to the fullest extent
(whether partial or complete) now or hereafter authorized or
permitted by law and as set forth in this Agreement, and, to the
extent insurance is maintained, for the continued coverage of
Indemnitee under the Company's directors' and officers' liability
insurance policies;
NOW, THEREFORE , in consideration of the
premises and of Indemnitee continuing to serve the Company directly
or, at its request, another enterprise, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Basic Indemnification Arrangement . If
the Indemnitee was, is or becomes at any time a party to or a
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, the Company
shall indemnify Indemnitee to the fullest extent now or hereafter
authorized or permitted by law as soon as practicable but in any
event no later than 30 days after written demand is presented to
the Company, against any and all Expenses, judgments, fines
(including excise taxes assessed against an Indemnitee with respect
to an employee benefit plan), penalties and amounts paid in
settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such
Claim; provided that such indemnification shall not apply to
any Claim if a judgment or other final adjudication adverse to the
Indemnitee establishes that his acts (i) were committed in bad
faith, or (ii) were the result of active and deliberate dishonesty
by the Indemnitee, or (iii) resulted in personal financial profit
or other advantage to which the Indemnitee was not legally entitled
or (iv) have been adjudged in a criminal proceeding, against either
the Company or the Indemnitee, to be acts as to which the trier of
fact or Reviewing Party concludes that Indemnitee did not have
reasonable cause to believe that his conduct was lawful.
In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled
to be indemnified hereunder the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled. For
purposes of this Agreement, the termination of any claim, action,
suit or proceeding, whether civil or criminal, by judgment, order,
settlement (whether with or without court approval) or conviction,
or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court
has determined that indemnification is not permitted by applicable
law.
For purposes of the foregoing indemnification
and elsewhere in this Agreement, the following definitions shall
apply:
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"Claim" means any threatened, pending or
completed action, suit or proceeding, or any inquiry or
investigation, whether instituted by the Company or any other
party, that Indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil,
criminal, administrative, investigative or other, provided,
however, that except for an action, claim or proceeding to enforce
this Agreement, a "Claim" shall not include any claim (including
any cross-claim or counterclaim) instituted by or at the direction
of Indemnitee unless such Claim was authorized by a majority of
disinterested members of the Board of Directors.
"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.
"Indemnitee" includes, in addition to the
Indemnitee named herein, such person's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Indemnitee should die while
any amounts would still be payable to Indemnitee hereunder if
Indemnitee had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Indemnitee's devisee, legatee or other
designee or, if there be no such designee, to Indemnitee's
estate.
"Indemnifiable Event" means any event or
occurrence related to the fact that Indemnitee is or was a director
or officer of the Company, or is or was serving at the request of
the Company as a director, officer, employee, trustee, agent or
fiduciary of another corporation of any type or kind, domestic or
foreign, partnership, joint venture, employee benefit plan, trust
or other enterprise, or by reason of anything done or not done by
Indemnitee in any such capacity.
"Reviewing Party" shall mean a majority of the
Company's directors who are disinterested in the Claim,
provided, however , in the event that there are fewer than
three such disinterested directors, the determination as to whether
an Expense Advance shall be made shall be referred by the Company
to an independent law firm selected by the Indemnitee from a list
of three or more such firms proposed by the Company, with the cost
of such review and determination borne by the Company; and
provided, further , in the event that there shall have been
a Change of Control (as hereafter defined) of the Company
subsequent to the date of the acts alleged to give rise to a Claim,
any director of the Company elected to the Board of Directors in
connection with or subsequent to such Change of Control of the
Company shall not be deemed to be disinterested. If the Company
shall fail or refuse to provide a list of three or more independent
law firms to act as the Reviewing Party within thirty days of
receipt of written notice of the commencement of a Claim, the
Company shall be deemed to have determined that the Indemnitee is
entitled to indemnification under the terms of this Agreement. As
used herein, an "independent law firm" shall mean a firm (i) having
25 or more attorneys, (ii) rated "av" in the Martindale-Hubbell Law
Directory, (iii) which has not, during the five years prior to the
Indemnifiable Event, been engaged by the Company, the Indemnitee or
any Acquiring Person (as hereafter defined).
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 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 relating in whole or in
part to an Indemnifiable Event or in defense of any issue or matter
therein, including dismissal without prejudice, Indemnitee shall be
indemnified, to the extent permitted by law, against all Expenses
incurred in connection with such Indemnifiable Event.
2. Payment; Advancement of Expenses Pending
Final Resolution . The obligation of the Company to make
payment with respect to Expenses incurred by Indemnitee shall be
absolute as of the time at which the Claim shall have been resolved
by settlement or final judgment to the extent that Indemnitee is
entitled to indemnification in accordance with paragraph 1 or as
otherwise provided in this Agreement. The obligations of the
Company and rights of Indemnitee under this Agreement shall in no
event be deemed to preclude any right to indemnification to which
Indemnitee may be entitled under Section 145 of the General
Corporation Law of the State of Delaware (the "DGCL").
In addition, during the pendency of any such
Claim and upon request by the Indemnitee, the Company shall advance
any and all Expenses to Indemnitee (an "Expense Advance") provided
that (i) the Company prior to making any such Expense Advance shall
receive the agreement and undertaking of the Indemnitee to repay
all such Expense Advances in the event the final resolution of the
Claim is such that Indemnitee is not entitled to indemnification
hereunder and (ii) in the event the Claim giving rise to the
request for an Expense Advance arises as a result of a claim by the
Company or by a shareholder of the Company, the obligation of the
Company to make any such Expense Advance shall be subject to a
determination by the Reviewing Party following a review of the
Claim that the conduct of the Indemnitee does not appear to
preclude indemnification under the proviso set forth in paragraph 1
above.
In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who shall execute all
papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to
enforce such rights.
The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made
against Indemnitee to the extent Indemnitee has otherwise actually
received payment (under any insurance policy, Bylaw or otherwise)
of the amounts otherwise indemnifiable hereunder. To the extent
that Indemnitee is entitled to indemnification in respect of a
Claim from another party (including, without limitation, any
subsidiary of the Company or any affiliate of the Company), the
Indemnitee shall assign such right to the Company.
3. Notification and Defense of Claim
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