Present: All the Justices 

CHRISTIAN S. HUTTER, ET AL. 

OPINION BY JUSTICE LEROY R. HASSELL, SR. 

v. Record No. 952047 September 13, 1996 

JOHN E. HEILMANN, ET AL. 

 FROM THE CIRCUIT COURT OF THE CITY OF LYNCHBURG 

J. Michael Gamble, Judge 

 In this appeal, we consider whether an indemnification 

agreement that the defendants had given to stockholders in return 

for their guarantees of a corporate debt survived the later 

conveyance by the stockholders of their corporate stock. 

 Christian S. Hutter, Beverly S. Hutter, Jr. (collectively 

referred to as the plaintiffs), and Norwood Enterprises, Inc., 

owned all the stock in Virginia Wood Window Company, Inc., which 

owned Bailey-Spencer Hardware Company, Inc. John E. Heilmann, 

the sole stockholder of Norwood Enterprises, was also the 

president and chief executive officer of Bailey-Spencer Hardware 

Company. In 1989, the Bailey-Spencer Hardware Company borrowed 

$253,000 from Crestar Bank, and the plaintiffs personally 

guaranteed this loan. 

 Initially, each of the plaintiffs and Norwood Enterprises 

"were equal one-third owners" of Virginia Wood Window Company; 

each owned 500 shares of common stock. In May 1990, plaintiffs, 

Heilmann, and Norwood Enterprises executed a "Buy-Sell Agreement" 

for the common stock of Virginia Wood Window Company. The 

Agreement provided that Virginia Wood Window Company would borrow 

$745,000 from Central Fidelity Bank, which required Heilmann to 

pledge certain of his real estate interests as collateral. 
Christian Hutter agreed to transfer certain of his stock shares 

to Norwood Enterprises so that it would then own a majority 

interest in Virginia Wood Window Company. 

 The Agreement contained a "put option" which gave the 

plaintiffs the right to require Norwood Enterprises to purchase 

their shares of stock in Virginia Wood Window Company for a price 

of 85% of the book value of Virginia Wood Window Company's stock. 

 The plaintiffs later exercised their "put options," transferred 

all their remaining Virginia Wood Window stock to Norwood 

Enterprises, and terminated their relationship with both 

companies. 

 Subsequently, Bailey-Spencer Hardware Company failed to pay 

Crestar Bank the amount outstanding on its loan. The plaintiffs 

paid Crestar Bank $120,000 to release them from any further 

liability to the bank on their personal guaranties. Plaintiffs 

filed their motion for judgment against Norwood Enterprises and 

John Heilmann, seeking indemnification under Article 5 of the 

Agreement. 

 Defendants filed numerous pleadings, including a motion for 

summary judgment. They asserted that, as a matter of law, the 

plaintiffs lost any rights of indemnification when they conveyed 

their stock in Virginia Wood Window Company. Plaintiffs also 

filed a motion for summary judgment, asserting that they are 

entitled to indemnification as a matter of law. The trial court 

held that under the terms of the Agreement, the plaintiffs lost 

their rights to indemnification when they conveyed their stock 

and accordingly entered judgment in favor of the defendants. We 
awarded the plaintiffs an appeal. 

 The following provisions in the Agreement are pertinent to 

our resolution of this appeal. Article 5 of the Agreement 

states: 

 "5.01. Indemnification. As to all debts or 

obligations of the Corporation or its subsidiaries 

(specifically including the Subsidiary Corporation) for 

which Shareholders or guarantors are personally liable, 

Shareholders and Heilmann agree to indemnify and hold 

harmless each other in the same ratio and proportion as 

their stock ownership (as it may exist from time to 

time). For the purposes of this Article alone, 

Heilmann shall be considered synonymous with Norwood." 

 Article 13 of the Agreement states in relevant part: 

 "13.01. Termination of Agreement. Except for the 

provisions of Article 5 hereof, which shall survive the 

termination of this Agreement, this Agreement shall 

terminate upon the occurrence of any of the following 

events: 

. . . . 

 (c) Death or dissolution of all the parties 

to this Agreement; 

 (d) The voluntary agreement of Shareholders 

who are then bound by the terms hereof and who own one 

hundred percent (100%) of the outstanding capital stock 

of the Corporation; 

. . . . 

 13.02. Termination of Shareholder's Obligation 

and Rights. Following the sale by a Shareholder of all 

of his shares of stock, or upon the Shareholder's death 

or dissolution, the Shareholder shall have no further 

rights or obligations under this Agreement to purchase 

additional shares or to guarantee the obligations of 

others hereunder, but shall have only the right and 

obligation to sell and to receive payment of the 

purchase price for any shares owned by him in the 

manner provided hereby." 

 The plaintiffs contend that the plain language of the 

indemnification provision requires that the defendants indemnify 
the plaintiffs for all debts of Virginia Wood Window Company, 

including the subsidiary corporation, for which they as 

shareholders or guarantors are personally liable. The plaintiffs 

say there is no dispute that they were personally liable to 

Crestar Bank by virtue of their status as guarantors of the loan. 

 The defendants argue that the trial court properly granted 

the motion for summary judgment. The defendants assert that the 

plaintiffs lost their rights of indemnity under Article 5 when 

they voluntarily ceased being shareholders in 1991. Moreover, 

the defendants contend that the indemnification provision only 

requires that they indemnify the shareholders in the same ratio 

and proportion as their stock ownership and, when the plaintiffs 

ceased owning stock, their "'ratio' of stock ownership was zero 

and their rights to indemnity under Article 5 were the same." 

 We disagree with the defendants. Several familiar 

principles govern our resolution of this dispute. First, when 

contract terms are clear and unambiguous, we must construe those 

terms according to their plain meaning. Bridgestone/Firestone v. 

Prince William Square, 250 Va. 402, 407, 463 S.E.2d 661, 664 

(1995); Foods First, Inc. v. Gables Associates, 244 Va. 180, 182, 

418 S.E.2d 888, 889 (1992). Additionally, "[t]he law will not 

insert by construction, for the benefit of a party, an exception 

or condition which the parties omitted from their contract by 

design or neglect." Bridgestone/Firestone, 250 Va. at 407, 463 

S.E.2d at 664. Moreover, we will construe the contract as a 

whole, and "[n]o word or clause is to be treated as meaningless 

if any reasonable meaning consistent with the other parts of the 
contract can be given to it." Vega v. Chattan Associates, 246 

Va. 196, 199, 435 S.E.2d 142, 143 (1993) (quoting Ames v. 

American Nat'l Bank, 163 Va. 1, 39, 176 S.E. 204, 216 (1934)). 

 Applying these principles here, we hold that the plaintiffs 

are entitled to indemnification as a matter of law. The plain 

language of Article 5 makes clear that the defendants agreed to 

indemnify the plaintiffs for all debts or obligations of Virginia 

Wood Window Company and Bailey-Spencer Hardware Company for which 

the plaintiffs, as guarantors, are personally liable. Without 

question, the plaintiffs were guarantors and personally liable to 

Crestar Bank on the loan. Further, Article 5 requires the 

defendants and plaintiffs "to indemnify and hold harmless each 

other in the same ratio and proportion as their stock ownership." 

 Contrary to the defendants' contention, the plaintiffs' transfer 

of their stock ownership did not adversely affect their 

entitlement to indemnification because Article 5 provides that 

the obligation to make indemnification is proportionate to stock 

ownership, not the right to receive indemnification. Thus, we 

are of the view that the defendants, who own 100% of the stock of 

Virginia Wood Window Company, in accordance with Article 5, are 

required to indemnify the plaintiffs for the entire amount of the 

$120,000 that the plaintiffs paid to Crestar Bank. 

 We find no merit in defendants' argument that the 

plaintiffs' rights to indemnification ceased when the plaintiffs 

conveyed their shares of stock. Paragraph 14.10 of the Agreement 

states, "[i]t is the desire and intent of the parties hereto 

. . . that this Agreement be liberally construed and broadly 
interpreted, consistent with its declared intents and purposes." 

 Among those intents and purposes are the desires of the 

plaintiffs and defendants to indemnify each other under certain 

circumstances described in Article 5. Our review of the plain 

language contained in the indemnification provision, along with 

Paragraph 14.10 and other provisions in the Agreement, leads us 

to conclude that the plaintiffs' rights to indemnification were 

not forfeited merely because they chose to convey stock as 

provided in the "put option." 

 We also find no merit in defendants' contention that because 

Article 13.01 provides that the indemnification provision "would 

only survive in the event of death, dissolution, bankruptcy 

and/or cessation of the business of Virginia Wood Window," the 

indemnification provision terminated when the plaintiffs conveyed 

their stock. The survival clause is not implicated here because 

the Agreement has not been terminated according to its terms. 

Hence, the Agreement remains in effect and governs the rights and 

obligations of the parties, including the reciprocal rights and 

obligations of indemnification. 

 Accordingly, we will reverse the judgment of the trial 

court, and we will enter final judgment here in favor of the 

plaintiffs. 

Reversed and final judgment.