Exhibit 10.1
 

 
INDEMNITY AGREEMENT
 
This Indemnity Agreement, dated as of May __, 2012 is made by and between Young
Innovations, Inc., a Missouri corporation (the “Company”) and _________________
(the “Indemnitee”).
 
RECITALS
 
A.           The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors or officers of corporations unless
they are protected by adequate indemnification, due to increased exposure to
litigation costs and risk resulting from their service to such corporations, and
due to the fact that the exposure frequently bears no reasonable relationship to
the compensation of such directors and officers;
 
B.           The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors and officers with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take;
 
C.           Plaintiffs often seek damages in such large amounts and the costs
of litigation may be so great (whether or not the case is meritorious), that the
defense and/or settlement of such litigation is usually beyond the personal
resources of directors and officers;
 
D.           Based upon their experience as business managers, the Board of
Directors of the Company (the “Board”) has concluded that, to retain and attract
talented and experienced individuals to serve as officers and directors of the
Company and its “subsidiaries” (as defined in Section 1 below) and to encourage
such individuals to take the business risks necessary for the success of the
Company and its subsidiaries, it is necessary for the Company to contractually
indemnify its directors and certain of its officers, and the directors and
certain of the officers of its subsidiaries, and to assume for itself maximum
liability for expenses and damages in connection with claims against such
officers, and directors in connection with their service to the Company and its
subsidiaries, and has further concluded that the failure to provide such
contractual indemnification could result in great harm to the Company and its
subsidiaries and the Company’s shareholders;
 
E.           Section 351.355 of the General and Business Corporation Law of
Missouri (“Section 351.355”), which is applicable to the Company, empowers the
Company to indemnify by agreement its officers, directors, employees and agents,
and persons who serve at the request of the Company as the directors, officers,
employees or agents of other corporations, partnerships, joint ventures, trusts
or enterprises, and expressly provides that the indemnification provided by
Section 351.355 is not exclusive; and
 
F.           The Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company and/or one or more of
its
 

 
 

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subsidiaries free from undue concern for claims for damages arising out of or
related to such services to the Company and/or one or more of its subsidiaries.
 
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
 
1. Definitions.  For the purposes of this Agreement, the following terms shall
have the meanings set forth below:
 
(a) Agent.  “agent” means any person who (i) is or was a director, officer,
employee, or other agent of the Company or a subsidiary of the Company, or (ii)
is or was serving at the request of, for the convenience of, or to represent the
“interest of the Company” or a subsidiary of the Company as a director, officer,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise.
 
(b) Controlled.  “controlled” means subject to the power to exercise a
controlling influence over the management or policies of a corporation,
partnership, joint venture, trust or other entity.
 
(c) Expenses.  “expenses” includes all direct and indirect costs of any type or
nature whatsoever (including, without limitation, all reasonable attorneys’ fees
and related disbursements, other out-of-pocket costs and reasonable compensation
for time spent by the Indemnitee for which he is not otherwise compensated by
the Company or any third party) actually and reasonably incurred by the
Indemnitee in connection with either the investigation, defense, settlement or
appeal of, or otherwise related to a proceeding or establishing or enforcing a
right to indemnification under this Agreement, Section 351.355 or otherwise.
 
(d) Proceeding.  “proceeding” means any threatened, pending, or completed
action, suit or other proceeding, whether civil, criminal, administrative,
investigative or any other type whatsoever.
 
(e) Subsidiary.  “subsidiary” means (i) any corporation of which 50% or more of
the outstanding voting securities are owned directly or indirectly by the
Company, or which is otherwise controlled by the Company, and (ii) any
partnership, joint venture, trust or other entity of which 50% or more of the
equity interest is owned directly or indirectly by the Company, or which is
otherwise controlled by the Company.
 
2. Agreement to Serve.  The Indemnitee agrees to serve and/or continue to serve
as an agent of the Company, at its will (or under separate agreement, if such
agreement exists), in the capacity Indemnitee currently serves as an agent of
the Company; provided, however, that nothing contained in this Agreement is
intended to or shall (i) restrict the ability of the Indemnitee to resign at any
time and for any reason from its current position, (ii) create any right to
continued employment of the Indemnitee in its current or any other position, or
(iii) restrict the ability of the Company to terminate the employment or agency
of Indemnitee at any time and for any reason.
 

 
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3. Indemnification as Agent.
 
(a) Third Party Actions.  If the Indemnitee was or is a party or is threatened
to be made a party to any proceeding (other than an action by or in the right of
the Company) by reason of the fact that he is or was an agent of the Company, or
by reason of anything done or not done by him in any such capacity or otherwise
at the request of the Company or any of its officers, directors, or
shareholders, the Company shall indemnify the Indemnitee against any and all
expenses and liabilities of any type whatsoever (including, but not limited to,
judgments, fines, excise taxes, penalties and amounts paid in settlement)
actually and reasonably incurred by him in connection with the investigation,
defense, settlement or appeal of, or otherwise related to such proceeding, if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Company, and, with respect to any criminal
action or proceeding, if he had no reasonable cause to believe his conduct was
unlawful.
 
(b) Derivative Actions.  If the 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 to procure a
judgment in its favor by reason of the fact that he is or was an agent of the
Company, or by reason of anything done or not done by him in any such capacity,
the Company shall indemnify the Indemnitee against any amounts paid in
settlement of any such proceeding and any and all expenses (including attorneys’
fees) actually and reasonably incurred by him in connection with the
investigation, defense, settlement, or appeal of, or otherwise related to such
proceeding, if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Company; except that no
indemnification under this subsection shall be made with respect to any claim,
issue or matter as to which such person has been finally adjudged to have been
liable to the Company, unless and only to the extent that the court in which
such proceeding was brought shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses as
the court shall deem proper.
 
(c) Other Actions and Amendments.  In addition to the indemnification provided
above, the Company shall indemnify Indemnitee to the fullest extent now or
hereafter permitted by law, with respect to any expenses and liabilities of any
type whatsoever arising because the Indemnitee was or is a party or is
threatened to be made a party to any proceeding by reason of the fact that he is
or was an agent of the Company, or by reason of anything done or not done by him
in any such capacity or otherwise at the request of the Company or any of its
officers, directors, or shareholders.  If the General and Business Corporation
Law of Missouri (the “Act”) is amended after the date hereof to permit the
Company to indemnify Indemnitee for expenses or liabilities, or to indemnify
Indemnitee with respect to any action or proceeding, not contemplated by this
Agreement, then this Agreement (without any further action be either party
hereto) shall automatically be deemed to be amended to require that the Company
indemnify Indemnitee to the fullest extent permitted by the Act.
 

 
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4. Indemnification as Witness.  Notwithstanding any other provision of this
Agreement, to the extent the Indemnitee is, by reason of the fact that he is or
was an agent of the Company, a witness in any proceeding, the Indemnitee shall
be indemnified against any and all expenses actually and reasonably incurred by
or for him in connection therewith.
 
5. Advancement of Expenses.  Subject to Section 8(a) below, the Company shall
advance all expenses actually and reasonably incurred by the Indemnitee in
connection with the investigation, defense, settlement or appeal of, or
otherwise related to any proceeding to which the Indemnitee is a party or is
threatened to be made a party by reason of the fact that the Indemnitee is or
was an agent of the Company.  Indemnitee hereby agrees to repay such amounts
advanced, without interest, only if, and to the extent that, it shall ultimately
be determined pursuant to Section 7 below that the Indemnitee is not entitled to
be indemnified by the Company.  The advances to be made hereunder shall be paid
by the Company to the Indemnitee within ten (10) days following delivery of a
written request therefor by the Indemnitee to the Company.
 
6. Indemnification Procedures.
 
(a) Notice by Indemnitee.  Promptly after receipt by the Indemnitee of notice of
the commencement of or the threat of commencement of any proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with respect
thereto may be sought from the Company under this Agreement, notify the Company
of the commencement or threat of commencement thereof; provided that the failure
to give such notice shall not impair Indemnitee’s rights under this Agreement.
 
(b) Notice to Insurer.  If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 6(a) above, the Company has in
effect an insurance policy or policies providing directors’ and officers’
liability insurance, the Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set forth in
the respective policies.  The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of
such policies.
 
(c) Assumption of Defense.  In the event the Company shall be obligated to pay
the expenses of the Indemnitee with respect to any proceeding, the Company shall
be entitled to assume the defense of such proceeding, with counsel of its
choosing, upon the delivery to the Indemnitee of written notice of its election
so to do.  After delivery of such notice, the Company will not be liable to the
Indemnitee under this Agreement for any fees and expenses of counsel which are
subsequently incurred by the Indemnitee with respect to the same proceeding;
provided, however, that the Indemnitee shall have the right to employ his
counsel in any such proceeding at the Indemnitee’s expense; and provided
further, that if (i) the employment of counsel by the Indemnitee has been
previously authorized by
 

 
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the Company, or (ii) the Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and the Indemnitee in the
conduct of any such defense, or (iii) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, then, in any such
case, the fees and expenses of Indemnitee’s counsel shall be at the expense of
the Company.
 
(d) Subrogation.  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 the Indemnitee.  Indemnitee shall execute all documents required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company to effectively bring
suit to enforce such rights.
 
7. Determination of Right to Indemnification.
 
(a) Successful Proceeding.  To the extent the Indemnitee has been successful, on
the merits or otherwise, in the defense of any proceeding referred to in Section
3 above, the Company shall indemnify the Indemnitee against any and all expenses
actually and reasonably incurred by him in connection therewith.  If Indemnitee
is not wholly successful in such proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
proceeding, the Company shall indemnify Indemnitee against any and all expenses
actually and reasonably incurred by or for him in connection with each
successfully resolved claim, issue or matter.  For purposes of this Section
7(a), the termination of any proceeding, or any claim, issue or matter in such a
proceeding, by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such proceeding, claim, issue or matter, so long as
there has been no finding (either adjudicated or pursuant to Section 7(c) below)
that Indemnitee (i) did not act in good faith, or (ii) did not act in a manner
reasonably believed to be in, or not opposed to, the best interests of the
Company, or (iii) with respect to any criminal proceeding, had reasonable
grounds to believe his conduct was unlawful.
 
(b) Other Proceeding.  In the event that Section 7(a) above is inapplicable, or
applicable only in part, the Company shall nevertheless indemnify the Indemnitee
unless, and only to the extent that, the Company shall prove by clear and
convincing evidence to a forum listed in Section 7(c) below that the Indemnitee
has not met the applicable standard of conduct set forth in Section 3 above, if
any, which entitles Indemnitee to such indemnification.
 
(c) Forum in Event of Dispute.  The Indemnitee shall be entitled to select the
forum in which the validity of the Company’s claim under Section 7(b) hereof
that the Indemnitee is not entitled to indemnification will be heard, from among
the following:
 
(i) a quorum of the Board consisting of directors who are not parties to the
proceeding for which indemnification is being sought;
 

 
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(ii) if a quorum of the Board is not obtainable (or, even if obtainable, if a
quorum of the Board described in clause (i) above concurs), legal counsel (with
no prior relationship to Indemnitee) selected by the Indemnitee, and reasonably
approved by the Board, which counsel shall make such determination in a written
opinion; or
 
(iii) the shareholders of the Company.
 
(d) Submission of Company’s Claim.  As soon as practicable, and in no event
later than thirty (30) days after written notice of the Indemnitee’s choice of
forum pursuant to Section 7(c) above, the Company shall, at its own expense,
submit to the selected forum in such manner as the Indemnitee or the
Indemnitee’s counsel may reasonably request, its claim that the Indemnitee is
not entitled to indemnification; and the Company shall act in the utmost good
faith to assure the Indemnitee a complete opportunity to defend against such
claim.
 
(e) Appeal to Court.  Notwithstanding a determination by any forum listed in
Section 7(c) above that Indemnitee is not entitled to indemnification with
respect to a specific proceeding, the Indemnitee shall have the right to apply
to the court in which that proceeding is or was pending or any other court of
competent jurisdiction, for the purpose of enforcing the Indemnitee’s right to
indemnification pursuant to this Agreement.
 
(f) Indemnity for Expenses in Enforcement of Agreement.  Notwithstanding any
other provision in this Agreement to the contrary, the Company shall indemnify
the Indemnitee against all expenses incurred by the Indemnitee in connection
with any hearing or proceeding under this Section 7 involving the Indemnitee and
against all expenses incurred by the Indemnitee in connection with any other
proceeding between the Company and the Indemnitee involving the interpretation
or enforcement of the rights of the Indemnitee under this Agreement unless a
court of competent jurisdiction finds that each of the claims and/or defenses of
the Indemnitee in any such proceeding was frivolous or made in bad faith.
 
8. Exceptions.
 
(a) Claims Initiated by Indemnitee.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify or advance expenses to the Indemnitee with respect
to proceedings or claims initiated or brought voluntarily by the Indemnitee and
not by way of defense, except with respect to proceedings brought to establish
or enforce a right to indemnification under this Agreement or any other statute
or law or otherwise as required under Section 351.355, but such indemnification
or advancement of expenses may be provided by the Company in specific cases if
the Board finds it to be appropriate.
 

 
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(b) Lack of Good Faith.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by the Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in such
proceeding was frivolous or made in bad faith.
 
(c) Unauthorized Settlements.  Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement to indemnify the Indemnitee for any amount paid in settlement of
a proceeding effected without the prior written consent of the Company.  The
Company agrees not to unreasonably withhold its consent to any settlement.
 
(d) No Duplicative Payment.  The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
 
9. Non-exclusivity.  The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnitee may have under any provision of law, the Company’s
Articles of Incorporation or By-laws, the vote of the Company’s shareholders or
disinterested directors, other agreements, or otherwise, both as to action in
his official capacity and as to action in another capacity while occupying a
position as an agent of the Company.
 
10. Interpretation of Agreement; Scope.  It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law.  The benefits of this Agreement shall inure to the Indemnitee
both with respect to acts done or not done by him both before and after this
date.
 
11. Burden of Proof.  In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption.
 
12. Severability.  If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the
validity, legality and enforceability of the remaining provisions of the
Agreement (including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be
 

 
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invalid, illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable and to give effect to
Section 10 hereof.
 
13. Modification and Waiver.  Except as contemplated by Section 3(c), no
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
 
14. Survival, Successors and Assigns.  The Indemnitee’s rights under this
Agreement shall continue after the Indemnitee has ceased acting as an agent of
the Company.  The terms of this Agreement shall be binding on and inure to the
benefit of the Company and its successors and assigns and shall be binding on
and inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and
administrators.
 
15. Gender.  The masculine, feminine or neuter pronouns used herein shall be
interpreted without regard to gender, and the use of the singular or plural
shall be deemed to include the other whenever the context so requires.
 
16. Notice.  All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
hand and receipted for by the party addressee or (ii) if mailed by certified or
registered mail with postage prepaid, on the third business day after the
mailing date.  Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.
 
17. Governing Law.  This Agreement shall be governed exclusively by and
construed according to the laws of the State of Missouri, as applied to
contracts between Missouri residents entered into and to be performed entirely
within Missouri.
 
18. Consent to Jurisdiction.  The Company and the Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Missouri
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of Missouri.
 
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The parties hereto have entered into this Indemnity Agreement effective as of
the date first above written.
 
Young Innovations, Inc.
 
By:  _________________________________                                                              
Its:    ________________________________                                                            
Address:  13705 Shoreline Court East
           Earth City, Missouri 63045
 

 

 

 
                         ____________________________________
                         ____________________________________
 
Address:     ___________________________                                                           
 

 

 
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