INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (this
“Agreement” ) is made as of this ___ day
of ___, 2005, by and between Retail Ventures, Inc., an Ohio
corporation (the “Company” ), and ___, an
individual ( “Indemnitee” ).
A. The
amended and restated articles of incorporation (the
“Articles” ) and the regulations (the
“Regulations” ) of the Company provide
for the indemnification of the directors and officers of the
Company to the greatest extent permitted by Ohio law, including the
Ohio General Corporation Law, as amended (the
“OGCL” ).
B. The
Articles, Regulations and 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 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 is aware 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not be amended or rescinded without the consent of the director or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.
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:
“Corporate Status” means the fact that a
person is or was a director and/or an officer of the Company. A
Proceeding 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.
“Expenses” shall include all reasonable
attorneys’ fees, disbursements and retainers, court costs,
transcript costs, fees of experts, witness fees, travel and
deposition costs, duplicating 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 years has been retained by or
performed services for the Company or any person to be indemnified
by the Company.
“Proceeding” includes any threatened,
pending or completed action, suit, arbitration, alternate 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 one initiated by
an Indemnitee pursuant to Section 7 of this Agreement
to enforce Indemnitee’s rights under this Agreement. 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.
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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, the Articles 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, 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, the Articles 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 Section 2.1 or 2.2 of this
Agreement, or in defense of any claim, issue or matter in such
Proceeding, Indemnitee shall be indemnified
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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
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).
3.2
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 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. 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
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presented to
the Company, but in no event later than (a) 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 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.
5.3
Reviewing Party . 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 Section 2.1 or 2.2 of this Agreement, a
determination with respect to Indemnitee’s entitlement
thereto shall be made in the specific case by one of the following
methods: (a) by a majority vote of a quorum of the Board
consisting of Disinterested Directors; or (b) 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
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
30 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 5.2 hereof, no
Independent Counsel shall have been selected or an Independent
Counsel shall have been selected but an objection thereto shall
have been properly made and remained unresolved, either the Company
or Indemnitee may petition the Franklin County Court of Common
Pleas of the State of Ohio or other court of competent jurisdiction
for resolution of any objection that shall have been made by the
Indemnitee to the selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the
court or by such other person as the court shall designate, and the
person with
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respect to whom
all objections are so resolved or the person so appointed shall act
as Independent Counsel under Section 5.3 hereof. The
Company shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such I
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