Exhibit 10.1


 


INDEMNIFICATION AGREEMENT


 


(Supreme Industries, Inc.)


 


THIS AGREEMENT is made this 30th day of
September, 2008, between Supreme Industries, Inc.,
a Delaware corporation (the “Company”),
and
                                (“Indemnitee”).  This Agreement completely replaces
and supersedes the Indemnification Agreement dated October 15, 1997,
between Indemnitee and the Company.


 


Competent and experienced persons are becoming more reluctant to serve
as directors and/or officers of corporations unless they are provided with
adequate protection against claims and actions against them for their
activities on behalf or at the request of such corporations, generally through
insurance and/or indemnification.


 


Uncertainties in the interpretations of the statutes and regulations,
laws, and public policies relating to indemnification of corporate directors
and officers are such as to make adequate, reliable assessment of the risks to
which directors and officers of such corporations may be exposed difficult,
particularly in light of the proliferation of lawsuits against directors and
officers generally.


 


The Board of Directors of the Company, based upon its business
experience, has concluded that the continuation of present trends in litigation
against corporate directors and officers will inevitably make it more difficult
for the Company to attract and retain directors and officers of the highest
degree of competence committed to the active and effective direction and
supervision of the business and affairs of the Company and its subsidiaries and
affiliates and the operation of its and their facilities. In fact, the Board
deems such consequence to be so detrimental to the best interests of the
Company that it has concluded that the Company should act to provide its
directors and officers with enhanced protection against inordinate risks
attendant on their positions in order to assure that the most capable persons
otherwise available will be attracted to, or will remain in, such positions. In
such connection, such directors have further concluded that it is not only
reasonable and prudent but necessary for the Company to obligate itself
contractually to indemnify, to the fullest extent permitted by applicable law,
financial responsibility for expenses and liabilities which might be incurred
by such individuals in connection with claims lodged against them for their
decisions and actions in such capacities.


 


The General Corporation Law of the State of Delaware, under which law
the Company is organized, empowers a corporation organized in Delaware to
indemnify persons who serve as directors and/or officers of the corporation, or
persons who serve at the request of the corporation as directors and/or
officers of an affiliated corporation, further specifies that the indemnification
provided by law “shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise,” and further
empowers a corporation to “purchase and
maintain insurance” on behalf of such persons “against any liability asserted 


 

















 


against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation would
have the power to indemnify him against any such liability under this
[provision].


 


The Certificate of Incorporation and Bylaws of the Company permit
indemnification to the fullest extent permitted by applicable law.


 


The Company desires to have the Indemnitee serve or continue to serve
as a director and/or officer of the Company, and/or as a director, officer,
employee, partner, trustee, agent, and/or fiduciary of such other corporations,
partnerships, joint ventures, employee benefit plans, trusts, and/or other
enterprises (herein referred to as “Company Affiliate”)
of which he or she has been or is serving, or will serve on behalf of or at the
request of or for the convenience of, or to represent the interests of the
Company, free from undue concern for unpredictable, inappropriate, or
unreasonable claims for damages by reason of his or her being, or having been,
a director and/or officer of the Company, and/or a director, officer, employee,
partner, trustee, agent, and/or fiduciary of a Company Affiliate, or by reason
of his or her decisions or actions on their behalf.


 


The Indemnitee is willing to serve, or to continue to serve, or to take
on additional service for, the Company and/or the Company Affiliate in such
aforesaid capacities on the condition that he or she be indemnified as provided
for herein.


 


Accordingly, in consideration of the premises and the covenants
contained herein, the Company and the Indemnitee do hereby covenant and agree
as follows:


 


1                                          Services to the Company: The
Indemnitee shall serve or continue to serve as a director and/or officer of the
Company (in the case of a Company officer at the will of the Company or under
separate contract, if any such contract exists or shall hereafter exist),
and/or as a director, and/or officer, or fiduciary of a Company Affiliate,
faithfully and to the best of his or her ability so long as he or she is duly
elected and qualified in accordance with the provisions of the Bylaws or other
applicable constitutive documents thereof; provided. however that: (a) the
Indemnitee may at any time and for any reason resign from such position
(subject to any contractual obligations which the Indemnitee has assumed apart
from this Agreement); and (b) neither the Company nor the Company
Affiliate will have any obligation under this Agreement to continue the
Indemnitee in any such position.


 


2                                          Right to Indemnification:


 


2.1                                 The Company shall,
except to the extent prohibited by applicable law as then in effect, indemnify
any Indemnitee who is or was involved in any manner (including, without
limitation, as a party or witness), or is threatened to be made so involved, in
any threatened, pending, or completed investigation, claim, action, suit, or
proceeding whether civil, criminal, administrative, or investigative (including,
without limitation, 


 


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any action, suit, or proceeding by or in the right of the Company to
procure a judgment in its favor) (herein referred to as a “Proceeding”)
by reason of the fact that such person is or was a director or officer of the
Company, and/or is or was serving at the request of the Company as a director
or officer, of any Company affiliate, against all expenses (including attorneys’
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by such person in connection with such Proceeding; provided.
however, that, except as provided in Paragraph 3.4, the foregoing shall not
apply to a director or officer of the Company with respect to a Proceeding that
was commenced by such director or officer. Such indemnification shall include
the right to receive payment in advance of any expenses incurred by the
Indemnitee in connection with such Proceeding, consistent with the provisions
of applicable law as then in effect.


 


2.2                                 Notwithstanding the
obligation of the Company to indemnify attorneys’ fees as above provided in
Paragraph 2.1, as a condition to being so indemnified the following shall
apply. With regard to any “Proceeding” (as
above defined), there will be groups the members of which have totally common
interests —  i.e., their goals are
identical and there are no conflicts-of-interest among them. At such time as
the determination of these groups has been completed (such determination to be
made by “Independent Counsel” [as hereafter
defined] if the parties involved cannot make such determination among
themselves), each group shall, by majority vote of those comprising such group,
select a single attorney or law firm to serve as (exclusive) legal counsel for
all of the members of such group. In the event that any member of any such
group acts independently by retaining the legal services of any other attorney
or law firm to additionally or separately represent him, her, or it, all legal
fees and expenses of such independently retained attorney or law firm shall be
the (sole) responsibility of such independently acting member of the group.


 


3                                          Advancement of Expenses; Procedures; Presumptions
and Effect of Certain Proceedings: Remedies: In furtherance, but
not in limitation, of the foregoing provisions, the following procedures,
presumptions, and remedies shall apply with respect to advancement of expenses
and the right to indemnification hereunder:


 


3.1                                 Advancement
of Expenses: All reasonable expenses incurred by or on behalf of
the Indemnitee in connection with any Proceeding shall, after initial approval
in accordance with Paragraph 3.2, be advanced to the Indemnitee by the Company
within twenty (20) calendar days after the receipt by the Company of a statement
or statements from the Indemnitee requesting such advance or advances from time
to time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall:  (a) be
delivered to the Company within ninety (90) days after the incurrence of the
expenses being reported on such statement or statements; 


 


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and (b) reasonably evidence the expenses incurred by the
Indemnitee (and, if required by law at the time of such advance, shall include
or be accompanied by an undertaking by or on behalf of the Indemnitee to repay
the amounts advanced if it should ultimately be determined that the Indemnitee
is not entitled to be indemnified against such expenses hereunder).


 


3.2                                 Procurement
for Determination of Entitlement to Indemnification:


 


3.2.1        To
obtain indemnification as herein provided, an Indemnitee shall submit to the
President or Secretary of the Company a written request, including such
documentation and information as is reasonably available to the Indemnitee and
reasonably necessary to determine whether and to what extent the Indemnitee is
entitled to indemnification (herein referred to as the “Supporting
Documentation”). The determination of the Indemnitee’s entitlement to indemnification
shall be made not later than 60 calendar days after receipt by the Company of
the written request for Indemnification together with the Supporting
Documentation. The Secretary or President of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that the Indemnitee has requested indemnification.


 


3.2.2        The
Indemnitee’s entitlement to indemnification hereunder shall (except as provided
in Subparagraph 3.2.3 below) be determined in one of the following ways (each
of which shall give effect to the presumptions set forth in Paragraph 3.3): (a) by
a majority vote of the Disinterested Directors (as hereinafter defined) if they
constitute a quorum of the Board of Directors; (b) by a written opinion of
Independent Counsel (as hereinafter defined) if a quorum of the Board of
Directors consisting of Disinterested Directors is not obtainable or, even if
obtainable, a majority of such Disinterested Directors so directs: (c) by
the stockholders of the Company (but only if a majority of the Disinterested
Directors, if they constitute a quorum of the Board of Directors, presents the
issue of entitlement to indemnification to the stockholders for their
determination); or (d) as provided in Paragraph 3.3. In the event that
this Subparagraph 3.2.2 applies, stockholder approval will be deemed to have
been received if the holders of a majority of the Company’s total common stock
outstanding vote in favor of such approval.


 


3.2.3        Notwithstanding
what is stated above, in the event of a Change in Control (see definition
contained in Exhibit “A” hereto) the
Indemnitee’s entitlement to indemnification shall be determined by a written
opinion of Independent Counsel in a written opinion to 


 


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the Board of Directors, a copy of which shall be delivered to the
Indemnitee. The Independent Counsel shall be selected by the Indemnitee. In the
event the Company objects to the Independent Counsel so selected, within seven
days after written notice of the selection has been given by the Indemnitee to
the Company, the Company may object to such selection by written notification
given to the Indemnitee. Such objection may be asserted only on the ground that
the Independent Counsel so selected does not meet the requirement of “Independent Counsel” as hereafter
defined, and the objection shall set forth with particularity the factual basis
of such assertion. If such written objection is made, the Independent Counsel
so selected may not serve as Independent Counsel unless and until a court has
determined that such objection is without merit. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with the performance of his or her
responsibilities hereunder, and the Company shall pay all reasonable fees and
expenses instant to the implementation of the procedures referred to above.
Upon the due commencement of any judicial proceeding or arbitration pursuant to
Subparagraph 3.4.1 hereof, the Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).


 


3.2.4        In
the event of a Potential Change in Control (as hereinafter defined), the
Company, upon written request by the Indemnitee, shall create a trust (which
shall be a “grantor trust” for federal income tax purposes) for the benefit of
the Indemnitee and from time to time upon written request of the Indemnitee
shall fund such trust in an amount sufficient to satisfy any and all expenses
which at the time of each such request it is reasonably anticipated will be
incurred in connection with a Proceeding for which the Indemnitee is entitled
to rights of indemnification under Paragraph 2 hereof, and any and all
judgments, fines, penalties, and settlement amounts of any and all proceedings
for which the Indemnitee is entitled to rights of indemnification under
Paragraph 2 from time to time actually paid or claimed, reasonably anticipated,
or proposed to be paid. The amount or amounts to be deposited in the trust
pursuant to the foregoing funding obligation shall be determined by the
Independent Counsel referred to in Subparagraph 3.2.2 above. The terms of the
trust shall provide that upon a Change in Control:  (i) the trust shall ‘not be revoked or
the principal thereof invaded, without the written consent of the Indemnitee; (ii) the
trustee shall advance, within two (2) business days of a request by the
Indemnitee, any and all expenses to the Indemnitee; (iii) the trust shall
continue to be funded by the Company in accordance with the funding obligations
set forth above; (iv) the trustee shall promptly 


 


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pay to the Indemnitee all amounts for which the Indemnitee is entitled
to indemnification pursuant to this Agreement or otherwise; and (v) all
unexpended funds in such trust shall revert to the Company upon a final
determination by such Independent Counsel that the Indemnitee has been fully
indemnified under the terms of this Agreement. The trustee shall be an
institutional trustee with a highly regarded reputation chosen by the
Indemnitee. Nothing in this Subparagraph 3.2.4 shall relieve the Company of any
of its obligations under this Agreement. Nothing contained in this Subparagraph
3.2.4. shall prevent the Board of Directors of the Company in its discretion at
any time and from time to time, upon request of the Indemnitee, from providing
security to the Indemnitee for the Company’s obligations hereunder through an
irrevocable line of credit, funded trust as described above, or other
collateral. Any such security, once provided to the Indemnitee, may not be
revoked or released without the Indemnitee’s prior written consent.


 


3.3           Presumptions and Effect of Certain Proceedings:
Except as otherwise expressly provided herein, the Indemnitee shall be presumed
to be entitled to indemnification hereunder upon submission of a request for
indemnification together with the Supporting Documentation in accordance with
Subparagraph 3.2.1, and thereafter the Company shall have the burden of proof
to overcome that presumption in reaching a contrary determination. In any
event, if the person or persons empowered under Paragraph 3.2 to determine
entitlement to indemnification have not been appointed or have not made a
determination within 60 calendar days after receipt by the Company of the
request therefor together with the Supporting Documentation, the Indemnitee shall
be deemed to be entitled to indemnification, and the Indemnitee shall be
entitled to such indemnification unless the Company establishes as provided in
the final sentence of Paragraph 3.4.2 or by written opinion of Independent
Counsel that: (a) the Indemnitee misrepresented or failed to disclose a
material fact in making the request for indemnification or in the Supporting
Documentation; or (b) such indemnification is prohibited by law. The
termination of any Proceeding described in Paragraph 2, or of any claim, issue,
or matter therein, by judgment, order, settlement, or conviction, or upon a
plea of nolo contendere  or
its equivalent, shall not, of itself, adversely affect the right of the
Indemnitee to indemnification or 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 Company or, with respect
to any criminal Proceeding, that the Indemnitee had reasonable cause to believe
that his or her conduct was unlawful.


 


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3.4                                 Remedies
of Indemnitee:


 


3.4.1                        In the event that a
determination is made pursuant to Paragraph 3.2 that the Indemnitee is not
entitled to indemnification hereunder: (a) the Indemnitee shall be
entitled to seek an adjudication of his or her entitlement to such
indemnification either, at the Indemnitee’s option, in (x) an appropriate
court of the State of Delaware or any other court of competent jurisdiction, or
(y) an arbitration to be conducted by a single arbitrator, selected by
mutual agreement of the Company and the Indemnitee (or, failing such agreement
by the then sitting Chief Judge of the United States District Court for the
appropriate jurisdiction), pursuant to the commercial arbitration rules of
the American Arbitration Association; (b) any such judicial proceeding or
arbitration shall be de novo, and
the Indemnitee shall not be prejudiced by reason of such adverse determination;
and (c) in any such judicial proceeding or arbitration, the Company shall
have the burden of proving that indemnification is prohibited by applicable
law. If any such determination is made, the Indemnitee shall be entitled, on
five days’ written notice to the Secretary of the Company, to receive the
written report of the persons making such determination, which report shall
include the reasons and factual findings, if any, upon which such determination
was based.


 


3.4.2                        If a determination has been
made, or is deemed to have been made, pursuant to Paragraph 3.2 or 3.3, that
the Indemnitee is entitled to indemnification, the Company shall be obligated
to pay the amounts constituting such indemnification within five days after
such determination has been made or deemed to have been made and shall be
conclusively bound by such determination unless the Company establishes as
provided in the final sentence of this paragraph that: (a) the Indemnitee
misrepresented or failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation; or (b) such
indemnification is prohibited by law. If either (x) advancement of
expenses is not timely made pursuant to Paragraph 3.1, or (y) payment of
indemnification is not made within five calendar days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Paragraph 3.2 or 3.3, the Indemnitee shall be entitled to seek
judicial enforcement of the Company’s obligation to pay to the Indemnitee such
advancement of expenses or indemnification. Notwithstanding the foregoing, the
Company may bring an action, in an appropriate court in the State of Delaware
or any other court of competent jurisdiction, contesting the right of the
Indemnitee to receive indemnification hereunder due to the occurrence of an
event described in subclause (a) or (b) of this Subparagraph 3.4.2
(herein referred to as a 


 


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“Disqualifying Event”); provided, however, that in any such
action the Company will have the burden of proving the occurrence of such
Disqualifying Event. 


 


3.4.3                        The Company shall be precluded
from asserting in any judicial proceeding or arbitration commenced pursuant to
this Paragraph 3.4 that the procedures and presumptions of this Paragraph 3 are
not valid, binding, and enforceable, and shall stipulate in any such court or
before any such arbitrator that the Company is bound by all of the provisions of
this Agreement.


 


3.4.4                        If the Indemnitee, pursuant to
this Paragraph 3.4, seeks a judicial adjudication of, or an award in
arbitration to enforce, his or her rights under, or to recover damages for
breach of, this Agreement, the Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, those expenses (see
definition contained in Paragraph 2 above) actually and reasonably incurred by
the Indemnitee if the Indemnitee prevails in such judicial adjudication or arbitration.
If it shall be determined in such judicial adjudication or arbitration that the
Indemnitee is entitled to receive part but not all of the indemnification or
advancement of expenses sought, the expenses incurred by the Indemnitee in
connection with such judicial adjudication or arbitration shall be prorated
accordingly.  Provided, however,
notwithstanding what has just been stated: 
(1) the amount of expenses for reimbursement during the Indemnitee’s
taxable year may not affect the expenses eligible for reimbursement in any
other taxable year; (2) the reimbursement of an eligible expense must be
made on or before ninety (90) days after the date the Indemnitee prevailed in
such adjudication or arbitration; (3) the right to reimbursement may not
be subject to liquidation or exchange for another benefit.  Further, the Indemnitee’s recovery from the
Company of any such expenses must take place during the duration of this
Agreement (see Paragraph 5.1 which follows).


 


3.5                                 Definitions:
For purposes of this Paragraph 3:


 


“Disinterested Director” means a director
of the Company who is not or was not a party to the Proceeding in respect of
which indemnification is sought by the Indemnitee.


 


“Independent Counsel” means
a law firm or a member of a law firm that neither presently is, nor in the past
five years has been, retained to represent: (a) the Company or the
Indemnitee in any matter material to either such party; or (b) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the 


 


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term “Independent Counsel” shall
not include any person who, under the applicable standards of professional
conduct then prevailing under the laws of the State of Delaware would have a
conflict of interest in representing either the company or the Indemnitee in an
action to determine the Indemnitee’s rights hereunder.


 


“Potential Change in Control” shall
be deemed to have occurred if: (i) the Company enters into an agreement,
the consummation of which would result in the occurrence of a Change in
Control; (ii) a person (including the Company) publicly announces a
legitimate intention to take or to consider taking actions which if consummated
would constitute a Change in Control; (iii) any person, other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned, directly or indirectly, by the shareholders
of the Company in substantially the same proportions as their ownership of
stock of the Company, who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 9.5 % or more of the
combined voting power of the Company’s then outstanding Voting Securities,
increases his or her beneficial ownership of such securities by five percentage
points or more over the percentage so owned by such person; or (iv) the
Board of Directors adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.


 


4                                          Other Rights to Indemnification:
The indemnification and advancement of costs and expenses (including attorneys’
fees and disbursements) provided by this Agreement shall not be deemed
exclusive of any other rights to which the Indemnitee may now or in the future
be entitled under any provision of applicable law, the Certificate of
Incorporation, or any Bylaw of the Company or any other agreement, or any vote
of directors or stockholders or otherwise, whether as to action in his or her
official capacity or in another capacity while occupying any of the positions
or having any of the relationships referred to in Paragraph 1 of this
Agreement.


 


5                                          Duration of Agreement:


 


5.1           This
Agreement shall be effective from and after the date hereof, and shall continue
until and terminate upon the later of: (i) the tenth (10th)
anniversary after the Indemnitee has ceased to occupy any of the positions or
have any of the relationships described in Paragraph 1 of this Agreement; or (ii) (a) the
final termination or resolution of all proceedings with respect to the
Indemnitee commenced during such ten (10) year period, and (b) either
(x) receipt by the Indemnitee of the Indemnification to which he or she is
entitled hereunder with respect thereto, or (y) a final adjudication or
binding arbitration that the Indemnitee is not entitled to any further
indemnification with respect thereto, as the case may be.


 


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5.2           This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of the Indemnitee and his or her heirs, devisees,
executors, administrators, or other legal representatives.


 


6.                                       Severability: If any provision or
provisions of this Agreement are held to be invalid, illegal, or unenforceable
under any particular circumstances or for any reason whatsoever: (a) the
validity, legality, and enforceability of the remaining provisions of this
Agreement (including, without limitation, all other portions of any paragraph
or clause of this Agreement that contains any provision that has been found to
be invalid, illegal, or unenforceable, that are not themselves invalid,
illegal, or unenforceable) or the validity, legality, or enforceability under
any other circumstances shall not in any way be affected or impaired thereby;
and (b) to the fullest extent possible consistent with applicable law, the
provisions of this Agreement (including, without limitation, all other portions
of any paragraph or clause of this Agreement that contains any such provision
that has been found to be invalid, illegal, or unenforceable, that are not
themselves invalid, illegal, or unenforceable) shall be deemed revised and
shall be construed so as to give effect to the intent manifested by this Agreement
(including the provision held invalid, illegal, or unenforceable).


 


7.                                       Identical Counterparts: This
Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original, but all of which together shall
constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence
the existence of this Agreement.


 


8.                                       Headings: The headings of the
paragraphs of this Agreement are inserted for convenience and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.


 


9.                                       Modification and Waiver: 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.


 


10.                                 Notification
and Defense of Claim: The Indemnitee agrees to notify the
Company promptly in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information, or other document relating to any
matter which may be subject to indemnification hereunder, whether civil,
criminal, or investigative; provided. however, that the failure of the
Indemnitee to give such notice to the Company shall not adversely affect the
Indemnitee’s rights under this Agreement except to the extent the Company has
been materially prejudiced as a direct result of such failure. Nothing in this
Agreement shall constitute a waiver of the Company’s right to seek
participation at its own expense in any Proceeding which may give rise to
indemnification hereunder.


 


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11.                                 Notices:
All notices, requests, demands, and other communications hereunder shall be in
writing and shall be deemed to have been duly given if: (i) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed; or (ii) mailed by certified or registered mail
with postage prepaid, on the third business day after the date on which it is
so mailed, in either case:


 


(a)           if to the
Indemnitee, at the address indicated on the signature page hereof;


 


(b)           if to the Company:


 


Supreme Industries, Inc.


2581 E. Kercher Road


Goshen, IN 46528


 


or to such address as may have been furnished to either party by the
other Party.


 


12            Governing Law: The parties hereto
agree that this Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware.


 


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


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Supreme Industries, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Robert W. Wilson,

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:

  
	
   

  	
   

  	
  Address:

  



 


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Exhibit “A”


to


Indemnification Agreement


 


I.              Change
in the ownership of a corporation


 


(A)  In general.  A change
in the ownership of a corporation occurs on the date that any one person, or
more than one person acting as a group, acquires ownership of stock of the
corporation that, together with stock held by such person or group, constitutes
more than 50 percent of the total fair market value or total voting power of
the stock of such corporation.  However,
if any one person, or more than one person acting as a group, is considered to
own more than 50 percent of the total fair market value or total voting power
of the stock of a corporation, the acquisition of additional stock by the same
person or persons is not considered to cause a change in the ownership of the
corporation (or to cause a change in the effective control of the
corporation).  An increase in the
percentage of stock owned by any one person, or persons acting as a group, as a
result of a transaction in which the corporation acquires its stock in exchange
for property will be treated as an acquisition of stock.  This applies only when there is a transfer of
stock of a corporation (or issuance of stock of a corporation) and stock in
such corporation remains outstanding after the transaction.


 


(B)                                Persons
acting as a group.  Persons will not be
considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public
offering.  However, persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase, or acquisition of stock, or
similar business transaction with the corporation.  If a person, including an entity, owns stock
in both corporations that enter into a merger, consolidation, purchase, or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders in a corporation prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.


 


II.                                     Change
in the effective control of a corporation.


 


(A)          In general.  Notwithstanding that a corporation has not
undergone a change in ownership, (see above), a change in the effective control
of a corporation occurs only on the date that either –


 


(1)           Any one person, or
more than one person acting as a group, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of stock of the corporation possessing 35 percent
or more of the total voting power of the stock of such corporation; or


 


(2)           A majority of
members of the corporation’s board of directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the corporation’s board of directors prior to the election,
provided that for purposes of this paragraph the term corporation refers solely
to the relevant corporation 


 


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for which no other corporation is a majority shareholder for purposes
of that paragraph (for example, if Corporation A is a publicly held corporation
with no majority shareholder, and Corporation A is the majority shareholder of
Corporation B, which is the majority shareholder of Corporation C, the term
corporation for purposes of this paragraph would refer solely to Corporation
A).


 


(B)                                Multiple
change in control events.  A change in
effective control also may occur in any transaction in which either of the two
corporations involved in the transaction has a change in control event.  Thus, for example, assume Corporation P
transfers more than 40 percent of the total gross fair market value of its
assets to Corporation O in exchange for 35 percent of O’s stock.  P has undergone a change in ownership of a
substantial portion of its asset, and O has a change in effective control.


 


(C)                                Acquisition
of additional control.  If any one
person, or more than one person acting as a group, is considered to effectively
control a corporation, the acquisition of additional control of the corporation
by the same person or persons is not considered to cause a change in the
effective control of the corporation (or to cause a change in the ownership of
the corporation).


 


(D)                               Persons
acting as a group.  Persons will not be
considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public
offering.  However, persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase, or acquisition of stock, or
similar business transaction with the corporation.  If a person, including an entity, owns stock
in both corporations that enter into a merger, consolidation, purchase, or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders in a corporation only with respect
to the ownership in that corporation prior to the transaction giving rise to
the change and not with respect to the ownership interest in the other
corporation.


 


III.                                 Change
in the ownership of a substantial portion of a corporation’s assets.


 


(A)          In general.  Change in the ownership of a substantial
portion of a corporation’s assets.  A change
in the ownership of a substantial portion of a corporation’s assets occurs on
the date that any one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or person) assets from the corporation
that have a total gross fair market value equal to or more than 40 percent of
the total gross fair market value of all of the assets of the corporation
immediately prior to such acquisition or acquisitions.  For this purpose, gross fair market value
means the value of the assets of the corporation, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
such assets.


 


(B)           Transfers to a
related person.


 


(1)           There is no change
in control event when there is a transfer to an entity that is controlled by
the shareholders of the transferring corporation immediately after the 


 


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transfer.  A transfer of assets
by a corporation is not treated as a change in the ownership of such assets if
the assets are transferred to –


 


(i)  A shareholder of the corporation (immediately before the
asset transfer) in exchange for or with respect to its stock;


 


(ii)  An entity, 50 percent or more of the total value or voting
power of which is owned, directly or indirectly, by the corporation;


 


(iii)  A person, or more than one person acting as a group, that
owns, directly or indirectly, 50 percent or more of the total value or voting
power of all the outstanding stock of the corporation; or


 


(iv)  An entity, at least 50 percent of the total value or voting
power of which is owned, directly or indirectly, by a person described in “(iii)”
immediately preceding.


 


(2)           A person’s status is
determined immediately after the transfer of the assets.  For example, a transfer to a corporation in
which the transferor corporation has no ownership interest before the
transaction, but which is a majority-owned subsidiary of the transferor corporation
after the transaction is not treated as a change in the ownership of the assets
of the transferor corporation.


 


(C)           Persons acting as a
group.  Persons will not be considered to
be acting as a group solely because they purchase assets of the same corporation
at the same time.  However, persons will
be considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase, or acquisition of assets, or
similar business transaction with the corporation.  If a person, including an entity shareholder,
owns stock in both corporations that enter into a merger, consolidation,
purchase, or acquisition of assets, or similar transaction, such shareholder is
considered to be acting as a group with other shareholders in a corporation
only to the extent of the ownership in that corporation prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.


 


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