E
xhibit 10.1
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT, made
and executed this day
of ,
2008, by and between Northern Technologies International
Corporation, a Delaware corporation (the “Company”),
and ,
an individual resident of the State
of (the
“Indemnitee”).
WHEREAS, the Company is aware that,
in order to induce highly competent persons to serve the Company as
directors or officers or in other capacities, the Company must
provide such persons with adequate protection through insurance and
indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on
behalf of the Company;
WHEREAS, the Company recognizes that
the increasing difficulty in obtaining directors’ and
officers’ liability insurance, the increases in the cost of
such insurance and the general reductions in the coverage of such
insurance have increased the difficulty of attracting and retaining
such persons;
WHEREAS, the Board of Directors of
the Company has determined that it is essential to the best
interests of the Company’s stockholders that the Company act
to assure such persons that there will be increased certainty of
such protection in the future;
WHEREAS, it is reasonable, prudent
and necessary for the Company contractually to obligate itself to
indemnify such persons to the fullest extent permitted by
applicable law so that they will continue to serve the Company free
from undue concern that they will not be so indemnified;
and
WHEREAS, the Indemnitee is willing
to serve, continue to serve, and take on additional service for or
on behalf of the Company or any of its direct or indirect
subsidiaries on the condition that he/she be so
indemnified.
NOW, THEREFORE, in consideration of
the premises and the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and
the Indemnitee do hereby agree as follows:
1.
Service by the Indemnitee . The Indemnitee agrees to
serve and/or continue to serve as a director, officer, employee or
other agent of the Company faithfully and will discharge his/her
duties and responsibilities to the best of his/her ability so long
as the Indemnitee is duly elected or qualified in accordance with
the provisions of the Company’s Certificate of Incorporation,
as amended or restated from time to time (the
“Certificate”) or the Company’s Bylaws, as
amended or restated from time to time (the “Bylaws”)
and the General Corporation Law of the State of Delaware, as
amended from time to time (the “DGCL”), or until
his/her earlier death, resignation or removal. The Indemnitee may
at any time and for any reason resign from such position (subject
to any other contractual obligation or other obligation imposed by
operation by law), in which event the Company shall have no
obligation under this Agreement to
continue to retain the
Indemnitee in any such position. Nothing in this Agreement shall
confer upon the Indemnitee the right to continue in the employ of
the Company or as a director of the Company or affect the right of
the Company to terminate the Indemnitee’s employment or
service at any time in the sole discretion of the Company, with or
without cause, subject to any contract rights of the Indemnitee
created or existing otherwise than under this
Agreement.
2.
Indemnification . The Company shall indemnify the
Indemnitee against all Expenses (as defined below), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by the Indemnitee as provided in this Agreement to the
fullest extent permitted by the Certificate, Bylaws and DGCL or
other applicable law in effect on the date of this Agreement and to
any greater extent that applicable law may in the future from time
to time permit. Without diminishing the scope of the
indemnification provided by this Section 2, the rights of
indemnification of the Indemnitee provided hereunder shall include,
but shall not be limited to, those rights hereinafter set forth,
except that no indemnification shall be paid to the
Indemnitee:
(a)
on account of any action, suit or proceeding in which judgment is
rendered against the Indemnitee for disgorgement of profits made
from the purchase or sale by the Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or similar provisions of any federal,
state or local statutory law;
(b)
on account of conduct of the Indemnitee which is finally adjudged
by a court of competent jurisdiction to have been knowingly
fraudulent or to constitute willful misconduct;
(c)
in any circumstance where such indemnification is expressly
prohibited by applicable law;
(d)
with respect to liability for which payment is actually made to the
Indemnitee under a valid and collectible insurance policy of the
Company or under a valid and enforceable indemnity clause, Bylaw or
agreement (other than this Agreement) of the Company, except in
respect of any liability in excess of payment under such insurance,
clause, Bylaw or agreement;
(e)
if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful (and, in
this respect, both the Company and the Indemnitee have been advised
that it is the position of the Securities and Exchange Commission
that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore,
unenforceable, and that claims for indemnification should be
submitted to the appropriate court for adjudication);
or
(f)
in connection with any action, suit or proceeding by the Indemnitee
against the Company or any of its direct or indirect subsidiaries
or the directors, officers, employees or other Indemnitees of the
Company or any of its direct or indirect subsidiaries,
(i) unless such indemnification is expressly required to be
made by law, (ii) unless the proceeding was authorized by the
Board of Directors of the Company,
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(iii) unless
such indemnification is provided by the Company, in its sole
discretion, pursuant to the powers vested in the Company under
applicable law, or (iv) except as provided in Sections 11 and
13 hereof.
3.
Actions or Proceedings Other Than an Action by or in the Right
of the Company . The Indemnitee shall be entitled to the
indemnification rights provided in this Section 3 if the
Indemnitee was or is a party or witness or is threatened to be a
party or witness to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative
or investigative in nature, other than an action by or in the
right of the Company, by reason of the fact that the Indemnitee is
or was a director, officer, employee, agent or fiduciary of the
Company, or any of its direct or indirect subsidiaries, or is or
was serving at the request of the Company, or any of its direct or
indirect subsidiaries, as a director, officer, employee, agent or
fiduciary of any other entity, including, but not limited to,
another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise, or
by reason of any act or omission by him/her in such capacity.
Pursuant to this Section 3, the Indemnitee shall
be indemnified against all Expenses, judgments, penalties
(including excise and similar taxes), fines and amounts paid in
settlement which were actually and reasonably incurred by the
Indemnitee in connection with such action, suit or proceeding
(including, but not limited to, the investigation, defense or
appeal thereof), if the Indemnitee acted in good faith and in a
manner the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his/her conduct was unlawful.
4.
Actions by or in the Right of the Company . The
Indemnitee shall be entitled to the indemnification rights provided
in this Section 4 if the Indemnitee was or is a party or
witness or is threatened to be made a party or witness to any
threatened, pending or completed action, suit or proceeding brought
by or in the right of the Company to procure a judgment in its
favor by reason of the fact that the Indemnitee is or was a
director, officer, employee, agent or fiduciary of the Company, or
any of its direct or indirect subsidiaries, or is or was serving at
the request of the Company, or any of its direct or indirect
subsidiaries, as a director, officer, employee, agent or fiduciary
of another entity, including, but not limited to, another
corporation, partnership, limited liability company, employee
benefit plan, joint venture, trust or other enterprise, or by
reason of any act or omission by him/her in any such capacity.
Pursuant to this Section 4, the Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred
by him/her in connection with the defense or settlement of such
action, suit or proceeding (including, but not limited to the
investigation, defense or appeal thereof), if the Indemnitee acted
in good faith and in a manner the Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company; provided
however, that no such indemnification shall be made in respect of
any claim, issue, or matter as to which the Indemnitee shall have
been adjudged to be liable to the Company, unless and only to the
extent that the Court of Chancery of the State of Delaware or the
court in which such action, suit or proceeding was brought shall
determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the
Indemnitee is fairly and reasonably entitled to be indemnified
against such Expenses actually and reasonably incurred by him/her
which such court shall deem proper.
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5.
Good Faith Definition . For purposes of this
Agreement, the Indemnitee shall be deemed to have acted in good
faith and in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, or, with
respect to any criminal action or proceeding to have had no
reasonable cause to believe the Indemnitee’s conduct was
unlawful, if such action was based on (i) the records or books of
the account of the Company or other enterprise, including financial
statements; (ii) information supplied to the Indemnitee by the
officers of the Company or other enterprise in the course of their
duties; (iii) the advice of legal counsel for the Company or
other enterprise; or (iv) information or records given in
reports made to the Company or other enterprise by an independent
certified public accountant or by an appraiser or other expert
selected with reasonable care by the Company or other
enterprise.
6.
Indemnification for Expenses of Successful Party .
Notwithstanding the other provisions of this Agreement, to the
extent that the Indemnitee has served on behalf of the Company, or
any of its direct or indirect subsidiaries, as a witness or other
participant in any class action or proceeding, or has been
successful, on the merits or otherwise, in defense of any action,
suit or proceeding referred to in Section 3 and 4 hereof, or
in defense of any claim, issue or matter therein, including, but
not limited to, the dismissal of any action without prejudice, the
Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by the Indemnitee in connection therewith,
regardless of whether or not the Indemnitee has met the applicable
standards of Section 3 or 4 and without any determination
pursuant to Section 8.
7.
Partial Indemnification . If the Indemnitee is
entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of the Expenses, judgments,
fines and amounts paid in settlement actually and reasonably
incurred by the Indemnitee in connection with the investigation,
defense, appeal or settlement of such suit, action, investigation
or proceeding described in Section 3 or 4 hereof, but is not
entitled to indemnification for the total amount thereof, the
Company shall nevertheless indemnify the Indemnitee for the portion
of such Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by the Indemnitee to
which the Indemnitee is entitled.
8.
Procedure for Determination of Entitlement to
Indemnification .
(a)
To obtain indemnification under this Agreement, the Indemnitee
shall submit to the Company a written request, including
documentation and information which is reasonably available to the
Indemnitee and is reasonably necessary to determine whether and to
what extent the Indemnitee is entitled to indemnification. The
Secretary of the Company shall, promptly upon receipt of a request
for indemnification, advise the Board of Directors in writing that
the Indemnitee has requested indemnification. Any Expenses incurred
by the Indemnitee in connection with the Indemnitee’s request
for indemnification hereunder shall be borne by the Company. The
Company hereby indemnifies and agrees to hold the Indemnitee
harmless for any Expenses incurred by the Indemnitee under the
immediately preceding sentence irrespective of the outcome of the
determination of the Indemnitee’s entitlement to
indemnification.
(b)
Upon written request by the Indemnitee for indemnification pursuant
to Section 3 or 4 hereof, the entitlement of the Indemnitee to
indemnification pursuant to the
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terms of this
Agreement shall be determined by the following person or persons,
who shall be empowered to make such determination: (i) if a
Change in Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) (unless the Indemnitee
shall request in writing that such determination be made by the
Board of Directors (or a committee thereof) in the manner provided
for in clause (ii) of this Section 8(b)) in a
written opinion to the Board of Directors, a copy of which shall be
delivered to the Indemnitee; or (ii) if a Change in Control
shall not have occurred, (A)(1) by the Board of Directors of
the Company, by a majority vote of Disinterested Directors (as
hereinafter defined) even though less than a quorum, or (2) by
a committee of Disinterested Directors designated by majority vote
of Disinterested Directors, even though less than a quorum, or
(B) if there are no such Disinterested Directors or, even if
there are such Disinterested Directors, if the Board of Directors,
by the majority vote of Disinterested Directors, so directs, by
Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to the Indemnitee. Such
Independent Counsel shall be selected by the Board of Directors and
approved by the Indemnitee. Upon failure of the Board of Directors
to so select, or upon failure of the Indemnitee to so approve, such
Independent Counsel shall be selected by the Chancellor of the
State of Delaware or such other person as the Chancellor shall
designate to make such selection. Such determination of entitlement
to indemnification shall be made not later than 45 days after
receipt by the Company of a written request for indemnification. If
the person making such determination shall determine that the
Indemnitee is entitled to indemnification as to part (but not all)
of the application for indemnification, such person shall
reasonably prorate such part of indemnification among such claims,
issues or matters. If it is so determined that the Indemnitee is
entitled to indemnification, payment to the Indemnitee shall be
made within ten days after such determination.
9.
Presumptions and Effect of Certain Proceedings .
(a)
In making a determination with respect to entitlement to
indemnification, the Indemnitee shall be presumed to be entitled to
indemnification he
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