Exhibit 10.1
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement is
made to be effective as of
, by and between International Textile Group, Inc., a Delaware
corporation (the “Indemnitor”), and
«First_Name» «Last_Name» (the
“Indemnitee”), a director and/or officer of the
Corporation and of one or more subsidiaries of the Corporation,
(the Corporation, and any such subsidiaries collectively referred
to as the “Corporations”).
RECITALS:
A. It is essential that each
Corporation be able to retain and attract as directors and officers
the most capable persons available.
B. The substantial increase in
corporate litigation and other investigative, regulatory and
enforcement actions subjects directors and officers to expensive
risks at the same time that the availability of directors’
and officers’ liability insurance has been severely
limited.
C. Article VIII of the
Corporation’s Second Amended and Restated Certificate of
Incorporation (as heretofore amended, the “Certificate of
Incorporation”) provides that each person who serves as a
director or officer of the Corporation or of any of its
subsidiaries shall be indemnified by the Corporation to the fullest
extent permitted or required by the General Corporation Law of the
State of Delaware (the “DGCL”), and it is now and has
been the express policy of the Indemnitor to indemnify the
directors and officers of the Corporation and of its
subsidiaries.
D. Article VIII of the Certificate
of Incorporation of the Corporation provides for indemnification
and advancement of expenses by Corporation of the officers and
directors of the Corporation and its subsidiaries. Such officers
and directors may also be entitled to indemnification pursuant to
applicable provisions of the DGCL or other applicable law. The
indemnification and advancement provisions set forth therein are
not exclusive, and contracts may be entered into between the
Corporation and its officers and directors with respect to
indemnification.
E. The Corporation has previously
authorized and entered into agreements setting forth the rights to
indemnification and advancement of expenses with its directors and
officers, and has sought to ensure that the indemnification
provided by the Corporation was available to the fullest extent
permitted by the DGCL and other applicable law, as in effect from
time to time.
F. The Indemnitee does not regard
the protection available under the respective organizational
documents of each Corporation and/or the directors’ and
officers’ insurance available to the Indemnitee as adequate
in the present circumstances, and may not be willing to serve or
continue to serve as a director and/or officer without adequate
protection.
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G. The Corporation desires that the
Indemnitee serve, or continue to serve, as a director and/or
officer of each Corporation and in order to induce such service,
the Corporation desires to provide the Indemnitee with the
indemnification provided for hereunder.
NOW, THEREFORE, the Indemnitor and
the Indemnitee do hereby agree as follows:
1. Agreement to Serve . The
Indemnitee agrees to serve or continue to serve, at the request of
the Indemnitor, as a director and/or officer of the Corporations
for so long as the Indemnitee is duly elected or appointed and
qualified or until such earlier time as the Indemnitee tenders a
resignation in writing or is removed from office. This Agreement
shall not be deemed an employment contract between any Corporation
and Indemnitee.
2. Definitions . As used in
this Agreement:
(a) The term
“Proceeding” shall include any threatened, pending or
completed action, suit, audit, arbitration, alternative dispute
resolution proceeding, investigation, inquiry, administrative
hearing or other actual, threatened or completed proceeding,
whether brought by or in the right of the Indemnitor or any
Corporation or otherwise and whether of a civil (including
intentional or unintentional tort claims), criminal,
administrative, investigative, regulatory or enforcement nature,
including, without limitation, actions involving the U.S.
Securities and Exchange Commission, state securities commissions,
the U.S. Department of Justice, the Federal Transportation Safety
Board, the Internal Revenue Service and state and local taxing
authorities, and any appeal therefrom.
(b) The term “Corporate
Status” shall mean the status of a person who is or was a
director, officer, partner, employee, agent or trustee of, or in a
similar capacity with, the Indemnitor or a Corporation (including
any predecessor entity thereto), or is or was serving, or has
agreed to serve, at the request of the Indemnitor or a Corporation
(including any predecessor entity thereto), as a director, officer,
partner, employee, agent or trustee of, or in a similar capacity
with, another corporation, partnership, joint venture, trust,
limited liability company or other enterprise.
(c) The term “Expenses”
shall include, without limitation, attorneys’ fees and costs,
retainers, court costs, transcript costs, fees and expenses of
experts, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and other
disbursements and expenses incurred by or on behalf of the
Indemnitee in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding, but shall
not include the amount of judgments, fines or penalties against
Indemnitee or amounts paid in settlement in connection with such
matters. Expenses shall include Expenses incurred in connection
with any appeal resulting from any Proceeding, including without
limitation, the premium, security for and other costs relating to
any cost bond, supersede as bond or other appeal bond or its
equivalent.
(d) The term “Independent
Legal Counsel” shall mean a law firm or a member of a law
firm that is experienced in matters of corporation law and neither
presently is, nor in the past five (5) years has been,
retained to represent: (i) the Indemnitor or Indemnitee in any
matter material to either such party or for which such law firm or
member is or was entitled to be paid
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more than $250,000 by any such party (other than
with respect to matters concerning the Indemnitee under this
Agreement, or of other indemnitees under similar indemnification
agreements); or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Legal Counsel” shall
not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Indemnitor or Indemnitee in an
action to determine Indemnitee’s rights under this
Agreement.
(e) References to “other
enterprise” shall include employee benefit plans; references
to “fines” shall include any excise tax assessed with
respect to any employee benefit plan; references to “serving
at the request of the Indemnitor or a Corporation” shall
include any service as a director, officer, partner, employee,
agent or trustee of, or in a similar capacity with, a Corporation
which imposes duties on, or involves services by, such director,
officer, partner, employee, agent or trustee with respect to an
employee benefit plan or its participants or beneficiaries; and a
person who acted in good faith and in a manner such person
reasonably believed to be in the interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner “not opposed to the best interests of a
Corporation” as referred to in this Agreement. It is agreed
that service as a director, officer, partner, employee, agent or
trustee of a Corporation is “at the request of” the
Indemnitor.
3. Indemnification in Third-Party
Proceedings . The Indemnitor shall indemnify the Indemnitee in
accordance with the provisions of this Section 3 if the
Indemnitee was or is a party to or is threatened to be made a party
to or otherwise involved in any Proceeding (other than a Proceeding
by or in the right of the Indemnitor or any Corporation to procure
a judgment in its favor) by reason of the Indemnitee’s
Corporate Status or by reason of any action alleged to have been
taken or omitted in connection therewith, against all Expenses,
judgments, liabilities, fines, penalties and amounts paid in
settlement (including, without limitation, all interest,
assessments and other charges paid or payable in connection with or
in respect of such Expenses, judgments, liabilities, fines,
penalties and amounts paid in settlement) actually and reasonably
incurred by or on behalf of the Indemnitee in connection with such
Proceeding or any claim, issue or matter therein, if the Indemnitee
acted in good faith and in a manner which the Indemnitee reasonably
believed to be in, or not opposed to, the best interests of the
Indemnitor or the relevant Corporation, as the case may be, 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, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Indemnitee did not act in good faith
and in a manner which the Indemnitee reasonably believed to be in,
or not opposed to, the best interests of the Indemnitor or the
relevant Corporation, as the case may be, and, with respect to any
criminal Proceeding, had reasonable cause to believe that his or
her conduct was unlawful.
4. Indemnification in Proceedings
by or in the Right of a Corporation . The Indemnitor shall
indemnify the Indemnitee in accordance with the provisions of this
Section 4 if the Indemnitee was or is a party to or is
threatened to be made a party to or otherwise involved in any
Proceeding by or in the right of the Indemnitor or any Corporation
to procure a judgment in its favor by reason of the
Indemnitee’s Corporate Status or by reason of any action
alleged to have been taken or omitted in connection therewith,
against all Expenses and, to the extent permitted by law, amounts
paid in settlement actually and reasonably incurred by or on behalf
of
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the Indemnitee in connection with such
Proceeding, if the Indemnitee acted in good faith and in a manner
which the Indemnitee reasonably believed to be in, or not opposed
to, the best interests of the Indemnitor or a Corporation, as the
case may be, except that no indemnification shall be made under
this Section 4 to the extent that any claim, issue, or matter
as to which the Indemnitee shall have been adjudged to be liable to
the Indemnitor or the relevant Corporation, as the case may be,
unless, and only to the extent, that the Court of Chancery of the
State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of such liability but in view of all the circumstances
of the case, the Indemnitee is fairly and reasonably entitled to
indemnity for such Expenses as the Court of Chancery or such other
court shall deem proper.
5. Exceptions to Right of
Indemnification . Notwithstanding anything to the contrary in
this Agreement: (a) except as set forth in Section 10,
the Indemnitor shall not be required to indemnify the Indemnitee
pursuant to this Agreement in connection with a Proceeding (or part
thereof) initiated by the Indemnitee unless the initiation thereof
was approved by the Board of Directors of a Corporation;
(b) the Indemnitor shall not indemnify the Indemnitee to the
extent the Indemnitee has actually received the proceeds of
insurance, and in the event the Indemnitor makes any
indemnification payments to the Indemnitee and the Indemnitee is
subsequently reimbursed for such indemnification payments from the
proceeds of insurance, the Indemnitee shall promptly refund such
indemnification payments to the Indemnitor to the extent of such
insurance reimbursement; and (c) the Indemnitor shall not
indemnify the Indemnitee hereunder to the extent that such
indemnification is not lawful.
6. Indemnification of Expenses of
Successful Party . Notwithstanding any other provision of this
Agreement, to the extent that the Indemnitee has been successful,
on the merits or otherwise, in defense of any Proceeding or in
defense of any claim, issue or matter therein, the Indemnitee shall
be indemnified against all Expenses incurred by or on behalf of the
Indemnitee in connection with such Proceeding. Without limiting the
foregoing, if any Proceeding or any claim, issue or matter therein
is disposed of, on the merits or otherwise (including a disposition
without prejudice), without (a) an adjudication that the
Indemnitee was liable to a Corporation, (b) a plea of guilty
or nolo contendere by the Indemnitee, (c) an adjudication that
the Indemnitee did not act in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best
interests of a Corporation and (d) with respect to any
criminal proceeding, an adjudication that the Indemnitee had
reasonable cause to believe his or her conduct was unlawful, the
Indemnitee shall be considered for the purposes hereof to have been
wholly successful with respect thereto.
7. Additional Indemnification and
Contribution .
(a) Notwithstanding any limitation
in Sections 3, 4, 5 or 6, the Indemnitor shall indemnify Indemnitee
to the fullest extent permitted by applicable law if Indemnitee was
or is a party to or is threatened to be made a party to or
otherwise involved in any Proceeding (including a Proceeding by or
in the right of the Indemnitor or any Corporation to procure a
judgment in its favor) by reason of the Indemnitee’s
Corporate Status or by reason of any action alleged to have been
taken or omitted in connection therewith, against all Expenses,
judgments, liabilities, fines, penalties and amounts paid in
settlement (including, without limitation, all interest assessments
and other charges paid or payable in connection with or in respect
of such
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Expenses, judgments, liabilities, fines,
penalties and amounts paid in settlement) actually and reasonably
incurred by or on behalf of the Indemnitee in connection with the
Proceeding or any claim, issue or matter therein.
(b) To the fullest extent
permissible under applicable law, if the indemnification and hold
harmless rights provided for in this Agreement are unavailable to
Indemnitee in whole or in part for any reason whatsoever, the
Indemnitor, in lieu of indemnifying and holding harmless
Indemnitee, shall pay, in the first instance, the entire amount
incurred by Indemnitee, whether for judgments, liabilities, fines,
penalties, amounts paid or to be paid in settlement or for
Expenses, in connection with any Proceeding without requiring
Indemnitee to contribute to such payment, and the Indemnitor hereby
waives and relinquishes any right of contribution it may have at
any time against Indemnitee.
(c) The Indemnitor shall not enter
into any settlement of any Proceeding in which the Indemnitor is
jointly liable with Indemnitee (or would be if joined in such
Proceeding) unless such settlement provides for a full and final
release of all claims asserted against Indemnitee.
(d) The Indemnitor hereby agrees to
fully indemnify and hold harmless Indemnitee from any claims for
contribution which may be brought by officers, directors or
employees of the Indemnitor who may be jointly liable with
Indemnitee.
(e) For purposes of Section 7,
the meaning of the phrase “to the fullest extent permitted by
applicable law” shall include, but not be limited
to:
(i) to the fullest extent permitted
by the provision of the DGCL that authorizes or contemplates
additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL or other
applicable statute, and
(ii) to the fullest extent
authorized or permitted by any amendments to or replacements of the
DGCL or other applicable statute adopted after the date of this
Agreement that increase the extent to which a corporation or other
entity may indemnify its officers and directors.
8. Notification and Defense of
Claim . The Indemnitee shall notify the Indemnitor in writing
as soon as practicable upon being served with any summons,
citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding that may be subject to
indemnification or advancement of Expenses covered hereunder;
provided , however , that the failure to provide such
notice to the Indemnitor shall not relieve the Indemnitor of any
liability or obligation which it may have to t
