Exhibit 10.21

 

INDEMNITY AGREEMENT

 

AGREEMENT made as of the 25th day of November 2003, by and among X-RITE,
INCORPORATED, a Michigan corporation (the “Corporation”), and L. PETER FRIEDER
(the “Indemnitee”) with respect to the following:

 

W I T N E S S E T H:

 

WHEREAS, the Board of Directors of the Corporation has recognized that the
present trend in litigation against corporate directors and officers, together
with new legislation, regulations, and rules which increase the obligations for,
and expectations of corporate directors and officers, have created a reluctance
in persons to serve in such a capacity and that such effect is likely to result
in less effective direction and supervision of the Corporation’s business
affairs;

 

WHEREAS, the Board of Directors of the Corporation has determined that such
consequences are so detrimental to the best interests of the Corporation and its
shareholders that its directors and certain officers should be provided with
protection against inordinate risks in order to insure that the most capable
persons available will be attracted to such a position;

 

WHEREAS, in light of the rising costs of and reduced coverage of director and
officers liability insurance, significant new legislation, regulations, and
rules governing the conduct of corporate directors and officers, and amendments
to the Michigan Business Corporation Act (“MBCA”), expanding the scope of
permissive indemnification of directors and officers, and establishing new
procedures for directors and officers to receive an advancement of Expenses (as
defined in Section 1(b)), it is reasonable and necessary for the Corporation to
contractually obligate itself to indemnify its directors and certain officers
for certain costs, expenses and other monetary liabilities to the fullest extent
permitted by law and as further provided in this Agreement.

 

NOW, THEREFORE, in order to induce Indemnitee to serve or continue to serve the
Corporation as a director and/or officer, and in consideration of the mutual
covenants and agreements hereinafter set forth, the parties agree as follows:

 

1. Definitions. As used herein, the following terms are defined as follows:

 

(a) Claim. Any threatened, pending or completed action, suit or proceeding, or
any inquiry or investigation, whether civil, criminal, administrative or
investigative and whether formal or informal, by reason of the fact that
Indemnitee is or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director or officer or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
whether for profit or not, specifically including, not by way of limitation, any
action related to certification of financial or other reports under the federal
securities laws.

 

(b) Expenses. Attorneys’ fees and all other costs, expenses and obligations
actually and reasonably paid or incurred in connection with investigating,
defending, participating or being a witness in, or preparing to defend,
participate or be a witness in any Claim or appeal therefrom.

 

2. Agreement to Serve. Indemnitee agrees to serve as a director and/or officer
of the Corporation to the best of his or her ability as long as he or she is
duly elected and qualified in accordance with the Articles of Incorporation and
Bylaws of the Corporation, or until his or her earlier resignation or removal.

 

3. Indemnification. Subject to the terms and conditions of this Agreement, the
Corporation hereby agrees to indemnify Indemnitee as follows:

 

(a) In the event Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in a Claim, the Corporation shall indemnify Indemnitee to the
fullest extent permitted by law and as provided in this Agreement, pursuant to
the authorization of the MBCA, against any and all Expenses, judgments, fines,
penalties and amounts paid in settlement of such Claim.

 

(b) The Corporation shall indemnify Indemnitee as soon as practicable, but in
any event not later than thirty (30) days after written demand is presented to
the Corporation.

 

--------------------------------------------------------------------------------

4. Condition Precedent to Indemnification. Indemnitee, as a condition precedent
to indemnification under this Agreement, shall tender written notice to the
Corporation as soon as practicable of any Claim made against him or her for
which indemnification will or likely will be sought under the terms of this
Agreement. Notice to the Corporation shall be directed to X-Rite, Incorporated,
3100 – 44th Street, S.W., Grandville, Michigan 49418, Attn: Corporate Secretary.
In addition, Indemnitee shall give the Corporation such information and
cooperation as may he reasonably necessary and requested by the Corporation.

 

5. Consent of Corporation. No amounts paid in settlement for which indemnity
will be sought hereunder shall be incurred without the Corporation’s written
consent, which consent shall not be unreasonably withheld.

 

6. Limitations on Indemnity.

 

(a) The Corporation shall not be liable under this Agreement to make any payment
in connection with any Claim made against Indemnitee:

 

(1) For which payment is made to Indemnitee under a valid and collectible
insurance policy, except for any excess beyond the amount of payment under such
insurance policy;

 

(2) To the extent by which Indemnitee is indemnified by the Corporation
otherwise than pursuant to this Agreement;

 

(3) For any of the following: (i) the amount of a financial benefit received by
a director to which he or she is not entitled; (ii) intentional infliction of
harm on the Corporation or its shareholders; (iii) a violation of Section 551 of
the MBCA; or (iv) an intentional criminal act, except as authorized in Section
564c of the MBCA;

 

(4) For an accounting of profits made from the purchase or sale by Indemnitee of
securities of the Corporation, within the meaning of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto, or similar successor
statutes or provisions of any state law; or

 

(5) For which payment of indemnification by the Corporation is otherwise
prohibited by applicable law. Both the Corporation and Indemnitee acknowledge
that in certain instances federal law or applicable public policy may prohibit
the Corporation from indemnifying its directors or officers under this Agreement
or otherwise. Indemnitee understands and acknowledges that the Corporation has
undertaken or may be required to in the future undertake with the Securities and
Exchange Commission to submit the question of indemnification to a certain court
in circumstances for a determination of the Corporation’s rights under public
policy to indemnify Indemnitee.

 

(b) Except as provided in Paragraph 8 hereof, the Corporation shall not be
liable under this Agreement to make any payment in connection with any action
initiated by Indemnitee against the Corporation or any director of the
Corporation, unless the Corporation has joined in or consented to the initiation
of such action.

 

7. Payment of Costs and Expenses in Advance. If requested by Indemnitee, the
Corporation shall pay (within ten (10) days of such written request) any and all
costs and Expenses incurred by Indemnitee in defending or investigating any
Claim, in advance of the final disposition of such Claim, upon the receipt of a
written undertaking by Indemnitee, executed personally or on his or her behalf,
to repay any such amounts if it is ultimately determined that Indemnitee did not
meet the applicable standard of conduct, if any, required by the MBCA or this
Agreement for indemnification under the circumstances.

 

2

--------------------------------------------------------------------------------

8. Indemnification for Additional Expenses. The Corporation shall indemnify
Indemnitee against any and all expenses, including attorneys’ fees, incurred by
Indemnitee in connection with any action, including expenses of preparation for
such action, brought by Indemnitee for: (a) indemnification or advance payment
of Expenses by the Corporation under this Agreement; or (b) recovery under any
directors’ liability insurance policy or policies maintained by the Corporation;
provided, however, that indemnification under this Paragraph 8 shall be limited
to those circumstances where the Indemnitee is successful in obtaining a
recovery of, or a determination that he or she is entitled to such
indemnification, advance expense payment or insurance recovery.

 

9. Partial Indemnification. In the event Indemnitee is entitled to
indemnification hereunder for a portion of the Expenses, judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred by him
or her in the investigation, defense, appeal or settlement of any Claim but not,
however, for all of the total amount thereof, the Corporation shall indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.

 

10. Subrogation. In the event of payment under this Agreement, the Corporation
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 Corporation effectively to bring suit
or enforce such rights

 

11. No Presumption. For purposes of this Agreement, the termination of any
action, suit or proceeding 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.

 

12. Specific Determination of Entitlement to Indemnification. In the event
Indemnitee is found liable to the Corporation as a result of any Claim brought
by or in the right of the Corporation, whether and the extent to which
Indemnitee is nevertheless entitled to indemnification, other than for expenses
of directors (for which indemnification is available), under this Agreement
shall be predicated on a determination that indemnification is appropriate in
light of the circumstances of the case and applicable legal standards, which
determination shall be made, at the option of Indemnitee, by: (a) majority vote
of a committee of two (2) or more disinterested directors appointed by the Board
of Directors; (b) independent legal counsel in a written opinion; or (c) the
court in which the Claim was brought.

 

13. Liability Insurance. To the extent the Corporation maintains an insurance
policy or policies providing liability insurance for directors or officers,
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage extended to any other
director or officer of the Corporation, if Indemnitee is a director; or any of
the Corporation’s officers if Indemnitee is not a director but is an officer.

 

14. Scope of Agreement. The rights of Indemnitee hereunder shall be in addition
to any other rights Indemnitee may have under any provision of the Corporation’s
Articles of Incorporation, Bylaws or laws of the state of Michigan. In the event
of any change after the date of this Agreement in any applicable law,
regulation, or rule which narrows the right of the Corporation to indemnify
directors and officers, such changes, to the extent not otherwise required by
such law, regulation, or rule to be applied to this Agreement shall have no
effect on the Agreement or the parties’ rights or obligations hereunder.

 

15. Amendment. Termination, and Waiver. This Agreement may be amended, modified,
supplemented, or terminated and any of the terms and conditions herein may be
waived only by the written consent of the parties hereto. The failure of any
party at any time or times to require performance of any provisions contained
herein shall in no manner affect the right of such party at any later time to
enforce the same.

 

16. Binding Effect and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Indemnitee and his personal representatives, heirs
and assigns, and the Corporation and its successors and assigns, including any
direct or indirect successor of the Corporation by purchase, merger,
consolidation or otherwise to all or substantially all of the business and/or
assets of the Corporation; provided, however, that no assignment of any rights
or delegation of obligations provided for herein may be made by either party
without the express written consent of the other party. This Agreement shall
continue in effect while Indemnitee is a director of the Corporation and for the
period immediately thereafter, terminating two (2) years subsequent to the
duration of any applicable period of limitations for commencing any claims.

 

3

--------------------------------------------------------------------------------

17. Governing Law. The parties hereto acknowledge and agree that this Agreement
shall be governed by, construed, and enforced in accordance with the laws, and
in the courts, of the state of Michigan, without regard to its conflicts of laws
principles.

 

18. Severability. Any provision of this Agreement which may be prohibited by
law, or otherwise held invalid by a court of competent jurisdiction, shall be
ineffective only to the extent of such prohibition or invalidity and shall not
invalidate or otherwise render ineffective the remaining provisions of this
Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

X-RITE, INCORPORATED  

Mary E. Chowning

Chief Financial Officer

INDEMNITEE  

L. Peter Frieder

 

4