Document:

Exhibit 10.45

 

Generac Holdings Inc.

2010 Equity Incentive Plan

 

NONQUALIFIED STOCK OPTION
AWARD AGREEMENT

 

THIS NONQUALIFIED STOCK OPTION AWARD AGREEMENT (the “Award Agreement”) is made effective as of
the              
day of                ,
2010 (the “Date of Grant”),
between Generac Holdings Inc., a Delaware corporation (the “Company”), and                  (the
“Participant”):

 

R E C I T A L S:

 

WHEREAS, the Company has adopted the Generac
Holdings Inc. 2010 Equity Incentive Plan (the “Plan”), which Plan is incorporated herein by reference and
made a part of this Award Agreement. 
Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan; and

 

WHEREAS, the Committee has determined that it would
be in the best interests of the Company and its stockholders to grant the
option provided for herein to the Participant pursuant to the Plan and the
terms set forth herein.

 

NOW THEREFORE, in consideration of the mutual
covenants hereinafter set forth, the parties agree as follows:

 

1.                                       Grant of the
Option.  The Company hereby grants to
the Participant the right and option (the “Option”)
to purchase, on the terms and conditions hereinafter set forth, all or any part
of an aggregate of              
Shares.  The Option is intended to be a Non-Qualified
Stock Option.

 

2.                                       Option Price.  The purchase price of the Shares subject to
the Option shall be           
per Share (the “Option Price”).

 

3.                                       Option Term.  The term of the Option shall be ten (10) years,
commencing on the Date of Grant (the “Option Term”).  The Option shall automatically terminate upon
the expiration of the Option Term, or at such earlier time specified herein or
in the Plan.

 

4.                                       Vesting of the
Option.  Subject to the Participant’s
continued service to the Company through the applicable vesting date, the
Option shall vest in equal installments on each of the first five (5) anniversaries
of the Date of Grant, such that twenty percent (20%) of the Option vests on
each such anniversary.  At any time, the
portion of the Option which has become vested in accordance with the terms
hereof shall be called the “Vested Portion”.

 

5.                                       Acceleration of
Vesting.  Notwithstanding Section 4
hereof, if within the one (1) year period following a Change of Control,
the Participant’s service is terminated by the Company or any Affiliate without
Cause, the Option shall immediately vest as of the date of such termination of
service.

 

 

6.                                       Termination of Service.

 

(a)                                  Termination of
Service for Cause.  Upon a
termination of the Participant’s service by the Company for Cause the Option,
including the Vested Portion, shall immediately terminate and be forfeited
without consideration.

 

(b)                                 Termination of
Service for Retirement, death or Disability.  Upon a termination of the Participant’s service
by reason of Retirement, death or Disability any unvested portion of the Option
shall immediately terminate and be forfeited without consideration and the
Vested Portion shall remain exercisable until the earlier of (i) one (1) year
following such termination of service and (ii) the expiration of the
Option Term.

 

(c)                                  Termination of
Service following a Change of Control.  Upon a termination of the Participant’s service
pursuant to Section 5 above, the Option shall remain exercisable
until the earlier of (i) one (1) year following such termination of service
and (ii) the expiration of the Option Term.

 

(d)                                 Other
Terminations of Service.  Upon
a termination of the Participant’s service for any reason, other than pursuant
to Sections 6(a), 6(b) and 6(c) above, any
unvested portion of the Option shall immediately terminate and be forfeited
without consideration and the Vested Portion shall remain exercisable until the
earlier of (i) Ninety (90) days following such termination of service and (ii) the
expiration of the Option Term.

 

7.                                       Exercise
Procedures.

 

(a)                                  Notice of
Exercise.  The
Participant or the Participant’s representative may exercise the Vested Portion
or any part thereof prior to the expiration of the Option Term by giving
written notice to the Company in the form attached hereto as Exhibit A
(the “Notice of Exercise”).  The Notice of Exercise shall be signed by the
person exercising such Option.  In the
event that such Option is being exercised by the Participant’s representative,
the Notice of Exercise shall be accompanied by proof (satisfactory to the
Company) of such representative’s right to exercise such Option.  In the event the Option is being exercised
following the termination of the Participant’s service, exercise shall be
subject to the Participant’s execution of an effective general release and
waiver of all claims against the Company, its Affiliates and their respective
officers and directors substantially in the form attached hereto as Exhibit B.

 

(b)                                 Method of
Exercise.  The
Participant or the Participant’s representative shall deliver to the Company,
at the time the Notice of Exercise is given, payment in a form permissible
under Section 6.5 of the Plan for the full amount of the aggregate Option
Price for the exercised Option.

 

(c)                                  Issuance of
Shares.  Provided the Company receives
a properly completed and executed Notice of Exercise, payment for the full
amount of the aggregate Option Price, and, if applicable, an effective release
and waiver of all claims as required by this Section 7, the Company
shall promptly cause to be issued certificates for the Shares underlying the
exercised Option, registered in the name of the Person exercising the
applicable Option.

 

8.                                       Restrictive Covenant Agreement.  The Participant and the Company have previously
entered into a restrictive covenant agreement. 
Participant hereby reaffirms his 

 

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obligations under such
restrictive covenant agreement and nothing contained in this Award Agreement
shall cancel, change or modify Participant’s obligations thereunder.

 

9.                                       Non-Disparagement.  The Participant, while providing services to
the Company and thereafter, shall not make any oral or written communication to
any Person that disparages, or has the effect of damaging the reputation of,
the Company, the Affiliates or their respective directors, officers, agents,
employees, former employees, representatives or stockholders; provided, that,
nothing in the foregoing shall preclude the Participant from disclosing any information
to Participant’s attorney or in response to a lawful subpoena or court order
requiring disclosure of information.

 

10.                                 Adjustment of
Shares.  In the event of any corporate
event or transaction (as described in Section 12.1 of the Plan),
the terms of this Award Agreement (including, without limitation, the number
and kind of Shares subject to this Agreement and the Option Price) may be
adjusted as set forth in Section 12.1 of the Plan.

 

11.                                 Definitions.

 

“Cause” shall mean, (i) a material breach by
the Participant of any of the Participant’s obligations under any written
agreement with the Company or any of its Affiliates, (ii) a material
violation by the Participant of any of the Company’s policies, procedures, rules and
regulations applicable to employees generally or to similarly situated
employees, in each case, as they may be amended from time to time in the
Company’s sole discretion; (iii) the failure by the Participant to
reasonably and substantially perform his or her duties to the Company or its
Affiliates (other than as a result of physical or mental illness or injury); (iv) the
Participant’s willful misconduct or gross negligence that has caused or is
reasonably expected to result in material injury to the business, reputation or
prospects of the Company or any of its Affiliates; (v) the Participant’s
fraud or misappropriation of funds; or (vi) the commission by the
Participant of a felony or other serious crime involving moral turpitude;
provided, that, in the case of the failures described in (i), (ii) and (iii) above,
such failures shall only constitute “Cause” after a written notice of such
failure is delivered to the Participant that specifically identifies the
specific failure that could lead to the Participant’s termination, and the Participant
does not remedy such failure within fifteen (15) business days after receipt of
such written notice, as prescribed within the notice.  Notwithstanding the foregoing, if the
Participant is a party to an employment agreement with the Company or any
Affiliate at the time of his or her termination of employment and such
employment agreement contains a different definition of “cause” (or any
derivation thereof), the definition in such employment agreement will control
for purposes of this Agreement.

 

“Disability”
shall mean the failure or inability of the Participant to perform duties with
the Company or any Affiliate for a period of at least 180 consecutive days (or
180 days during any twelve (12) month period) by reason of any physical or
mental condition, as determined reasonably and in good faith by the Committee; provided,
that, if the Company’s long term disability plan contains a definition
of “disability,” the definition in such plan will control for purposes of this
Agreement.

 

“Retirement” shall
mean retirement from employment or service as a Director with the Company or
any Affiliate, as determined by the Committee in its sole discretion.

 

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12.                                 No Right to
Continued Service.  The
granting of the Option evidenced hereby and this Award Agreement shall impose
no obligation on the Company or any Affiliate to continue the Service of the
Participant and shall not lessen or affect any right that the Company or any
Affiliate may have to terminate the service of such Participant.

 

13.                                 Securities
Laws/Legend on Certificates.  The issuance and delivery of Shares shall
comply (or be exempt from) all applicable requirements of law, including
(without limitation) the Securities Act of 1933, as amended, the rules and
regulations promulgated thereunder, state securities laws and regulations, and
the regulations of any stock exchange or other securities market on which the
Company’s securities may then be traded. 
The Company shall not be obligated to file any registration statement
under any applicable securities laws to permit the purchase or issuance of any
Shares under the Plan or Awards, and accordingly any certificates for Shares or
documents granting Awards may have an appropriate legend or statement of applicable
restrictions endorsed thereon.  If the
Company deems it necessary to ensure that the issuance of Shares under the Plan
is not required to be registered under any applicable securities laws, each
Participant to whom such Shares would be issued shall deliver to the Company an
agreement or certificate containing such representations, warranties and
covenants as the Company may reasonably request which satisfies such
requirements.

 

14.                                 Transferability.  Unless otherwise provided by the Committee, the
Option may not be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant other than by will or by the laws
of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided, that,
the designation of a beneficiary shall not constitute an assignment,
alienation, pledge, attachment, sale, transfer or encumbrance.  No such permitted transfer of the Option to
heirs or legatees of the Participant shall be effective to bind the Company
unless the Committee shall have been furnished with written notice thereof and
a copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions hereof.  During
the Participant’s lifetime, the Option is exercisable only by the Participant.

 

15.                                 Withholding.  The Participant may be required to pay to the
Company or any Affiliate and the Company shall have the right and is hereby
authorized to withhold, any applicable withholding taxes in respect of the
Option, its exercise or transfer and to take such other action as may be
necessary in the opinion of the Committee to satisfy all obligations for the
payment of such withholding taxes.

 

16.                                 Notices.  Any notification required by the terms of this
Award Agreement shall be given in writing and shall be deemed effective upon
personal delivery or within three (3) days of deposit with the United
States Postal Service, by registered or certified mail, with postage and fees
prepaid.  A notice shall be addressed to
the Company, Attention: General Counsel, at its principal executive office and
to the Participant at the address that he or she most recently provided to the
Company.

 

17.                                 Entire
Agreement.  This Award
Agreement and the Plan constitute the entire contract between the parties
hereto with regard to the subject matter hereof.  They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.

 

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18.                                 Waiver.  No waiver of any breach or condition of this
Award Agreement shall be deemed to be a waiver of any other or subsequent
breach or condition whether of like or different nature.

 

19.                                 Successors and
Assigns.  The provisions of this Award
Agreement shall inure to the benefit of, and be binding upon, the Company and
its successors and assigns and upon the Participant, the Participant’s assigns
and the legal representatives, heirs and legatees of the Participant’s estate,
whether or not any such person shall have become a party to this Award
Agreement and have agreed in writing to be joined herein and be bound by the
terms hereof.

 

20.                                 Choice of Law.  This Award Agreement shall be governed by the
law of the State of Delaware (regardless of the laws that might otherwise
govern under applicable Delaware principles of conflicts of law) as to all
matters, including but not limited to matters of validity, construction,
effect, performance and remedies.

 

21.                                 Option Subject
to Plan.  By entering into this Award
Agreement the Participant agrees and acknowledges that the Participant has
received and read a copy of the Plan. 
The Option is subject to the Plan. 
The terms and provisions of the Plan as it may be amended from time to
time are hereby incorporated herein by reference.  In the event of a conflict between any term
or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.

 

22.                                 No Guarantees
Regarding Tax Treatment.  The
Participant (or their beneficiaries) shall be responsible for all taxes with
respect to the Option.  The Committee and
the Company make no guarantees regarding the tax treatment of the Option.  Neither the Committee nor the Company has any
obligation to take any action to prevent the assessment of any tax under Section 409A
of the Code or Section 457A of the Code or otherwise and none of the
Company, any Affiliate, or any of their employees or representatives shall have
any liability to the Participant with respect thereto.

 

23.                                 Amendment.  The Committee may amend or alter this Award
Agreement and the Option granted hereunder at any time, subject to the terms of
the Plan.

 

24.                                 Severability.  The provisions of this Award Agreement are
severable and if any one or more provisions are determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions shall
nevertheless be binding and enforceable.

 

25.                                 Signature in
Counterparts.  This Award
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.

 

*                                                                                         *                                                                                         *

 

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IN WITNESS WHEREOF, the parties hereto have executed
this Award Agreement.

 

	
   

  	
   

  	
  GENERAC
  HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed
  and acknowledged as

  of the date first above written:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PARTICIPANT

  	
   

  	
   

  

 

SIGNATURE PAGE to 

AWARD agreement

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

	
  Generac
  Holdings Inc.

  	
   

  	
   

  
	
  S45
  W29290 Hwy. 59

  	
   

  	
   

  
	
  Waukesha,
  Wisconsin 53187

  	
   

  	
   

  
	
  Attn:

  	
   

  	
  Date
  of Exercise: 

  

 

Ladies & Gentlemen:

 

1.                                       Exercise
of Option.  This
constitutes notice to Generac Holdings, Inc. (the “Company”) that
pursuant to my Nonqualified Stock Option Award Agreement (the “Award
Agreement”) under the Company’s 2010 Equity Incentive Plan (the “Plan”)
I elect to purchase the number of Shares of Company common stock set forth
below and for the price set forth below. 
By signing and delivering this notice to the Company, I hereby
acknowledge that I am the holder of the stock option (the “Option”) exercised
by this notice and have full power and authority to exercise the same.

 

	
  Date
  of Grant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Number
  of Shares as to

  	
   

  	
   

  
	
  which
  the Option is exercised

  	
   

  	
   

  
	
  (“Optioned
  Shares”):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Certificates
  to be issued in 

  	
   

  	
   

  
	
  name
  of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  exercise price:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Cash Exercise  

  	
   

  	
   

  
	
  Cash
  payment delivered 

  	
   

  	
   

  
	
  herewith:

  	
   

  	
  $

  

 

2.                                       Form of
Payment.  Forms of payment other than
cash or its equivalent (e.g. by cashier’s check) are limited by the Plan and
are permissible only to the extent approved by the compensation committee of
the Board of Directors of the Company (the “Committee”) or any committee
designated thereby, in its sole discretion.

 

3.                                       Delivery
of Payment.  With this
notice, I hereby deliver to the Company the full purchase price of the Optioned
Shares and any and all withholding taxes due in connection with the exercise of
my Option.

 

4.                                       Rights
as Stockholder.  While the
Company will endeavor to process this notice in a timely manner, I acknowledge
that until the issuance of the shares underlying the Optioned Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to such
shares, notwithstanding the exercise of my 

 

 

option(s). 
No adjustment shall be made for a dividend or other right for which the
record date is prior to the date of issuance of the optioned stock.

 

5.                                       Interpretation.  Any dispute regarding the interpretation of
this notice shall be submitted promptly by me or by the Company to the Committee,
which shall review such dispute at its next regular meeting.  The resolution of such a dispute by such
administrator of the Plan shall be final and binding on all parties.

 

6.                                       Governing
Law; Severability.  This notice
is governed by the internal substantive laws but not the choice of law rules,
of Delaware.  In the event that any provision hereof
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this notice will continue in full force and effect
without said provision.

 

7.                                       Entire
Agreement.  The Plan
and the Award Agreement under which the Optioned Shares were granted are
incorporated herein by reference, and together with this notice constitute the
entire agreement of the parties with respect to the subject matter hereof.

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (social security number)

  

 

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EXHIBIT B

 

FORM OF RELEASE

 

A release is required as a
condition for receiving the benefits provided pursuant to the Nonqualified
Stock Option Award Agreement between GENERAC HOLDINGS INC. (the “Company”) and [                     ]
(“Participant”)
dated [                      ],
2010, (the “Agreement”);
thus, by executing this release (“Release”), you have advised us that you hold
no claims against the Company, its predecessors, successors or assigns,
affiliates, shareholders or members and each of their respective officers, directors,
agents and employees (collectively, the “Releasees”), and by execution of this Release
you agree to waive and release any such claims, except relating to any
compensation, severance pay and benefits described in any written agreement
between you and the Company.

 

You understand and agree that this Release will
extend to all claims, demands, liabilities and causes of action of every kind,
nature and description whatsoever, whether known, unknown or suspected to
exist, which you ever had or may now have against the Releasees in your
capacity as an employee of the Company, including, without limitation, any
claims, demands, liabilities and causes of action arising from your employment
with the Releasees and the termination of that employment, including any claims
for severance or vacation pay, business expenses, and/or pursuant to any
federal, state, county, or local employment laws, regulations, executive
orders, or other requirements, including, but not limited to, Title VII of the
1964 Civil Rights Act, the 1866 Civil Rights Act, the Age Discrimination in
Employment Act as amended by the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, the Civil Rights Act of 1991, the Workers
Adjustment and Retraining Notification Act and any other local, state or
federal fair employment laws, and any contract or tort claims.

 

You understand and agree that this Release is
intended to include all claims by you or on your behalf alleging discrimination
on the basis of race, sex, religion, national origin, age, disability, marital
status, or any other protected status or involving any contract or tort claims
based on your termination from the Company. 
It is also acknowledged that your termination is not in any way related
to any work-related injury.

 

It also is understood and agreed that the remedy at
law for breach of the Award Agreement, any restrictive covenant agreements
between you and the Company, and/or this Release shall be inadequate, and the
Company shall be entitled to injunctive relief in respect thereof.

 

Your ability to receive payments and benefits under
the terms of the Award Agreement will remain open for a 21-day period after
your Termination Date to give you an opportunity to consider the effect of this
Release.  At your option, you may elect
to execute this Release on an earlier date. 
Additionally, you have seven days after the date you execute this
Release to revoke it.  As a result, this
Release will not be effective until eight days after you execute it.  We also want to advise you of your right to
consult with legal counsel prior to executing a copy of this Release.

 

Finally, this is to expressly acknowledge:

 

·                                     You understand that you are
not waiving any claims or rights that may arise after the date you execute this
Release.

 

 

·                                     You understand and agree
that the compensation and benefits described in the Award Agreement offer you
consideration greater than that to which you would otherwise be entitled.

 

I hereby state that I have carefully read this
Release and that I am signing this Release knowingly and voluntarily with the
full intent of releasing the Releases from any and all claims, except as set
forth herein.  Further, if signed prior
to the completion of the 21 day review period, this is to acknowledge that I
knowingly and voluntarily signed this Release on an earlier date.

 

 

	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  

 

2Exhibit 10.53

 

INDEMNIFICATION AGREEMENT

 

THIS
INDEMNIFICATION AGREEMENT (the “Agreement”)
is made and entered into as of [                        ],
2010 between GENERAC POWER SYSTEMS, INC., a Wisconsin corporation (the “Company”), and [                            ]
(“Indemnitee”).  Capitalized terms not defined elsewhere in
this Agreement are used as defined in Section 14.

 

WHEREAS, highly competent
persons have become more reluctant to serve corporations as directors or
officers or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporation;

 

WHEREAS, the Board of Directors
of the Company (the “Board”)
has determined that, in order to attract and retain qualified individuals, the
Company will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its affiliates
(including, without limitation, Generac Holdings Inc., a Delaware corporation
and the Company’s indirect parent (“Holdings”)) from certain
liabilities.  Although the furnishing of
such insurance has been a customary and widespread practice among United
States-based corporations and other business enterprises, the Company believes
that, given current market conditions and trends, such insurance may be
available to it in the future only at higher premiums and with more exclusions.  At the same time, directors, officers, and
other persons in service to corporations or business enterprises are being
increasingly subjected to expensive and time-consuming litigation relating to,
among other things, matters that traditionally would have been brought only
against the Company or business enterprise itself.  The Amended and Restated Articles of
Incorporation of the Company (the “Charter”) and the Amended and
Restated By-Laws of the Company (the “By-Laws”) require indemnification of the
officers and directors of the Company. 
Indemnitee may also be entitled to indemnification pursuant to the
Wisconsin Business Corporation Law (“WBCL”)
or the General Corporation Law of the State of Delaware (“DGCL”) in the
case of officers and directors of Holdings. 
The Charter, the By-Laws and the WBCL expressly provide that the
indemnification provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into between the Company and members
of the Board, officers and other persons with respect to indemnification;

 

WHEREAS, the
uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has
determined that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s shareholders and
that the Company should act to assure such persons that there will be increased
certainty of such protection in the future;

 

WHEREAS, it is
reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the
fullest extent permitted by applicable law so that they will serve or continue
to serve the Company free from undue concern that they will not be so
indemnified;

 

 

WHEREAS, this Agreement
is a supplement to and in furtherance of the Charter and the By-Laws and any
resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;

 

WHEREAS, the Company will
receive funds generated by the initial public offering (the “IPO”)
undertaken by Holdings, which funds will be contributed to the Company and used
by the Company for its corporate purposes, including reducing the Company’s
debt obligations;

 

WHEREAS, the board of
directors and officers of Holdings provide services, guidance and other
benefits to the Company;

 

WHEREAS, Indemnitee does
not regard the protection available under the Company’s By-Laws and Charter (or
the By-laws or certificate of incorporation of Holdings, as applicable) and
insurance as adequate in the present circumstances, and may not be willing to
serve as an officer or director without adequate protection, and the Company
desires Indemnitee to serve in such capacity. 
Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he be
so indemnified; and

 

WHEREAS, Indemnitee has
certain rights to indemnification and/or insurance provided by CCMP Capital
Advisors, LLC (“CCMP”) which Indemnitee and CCMP intends to be secondary
to the obligation of the Company to indemnify Indemnitee as provided herein,
with the Company’s acknowledgement and agreement to the foregoing being a
material condition to Indemnitee’s willingness to serve on the Board.

 

NOW, THEREFORE, in
consideration of (1) Indemnitee’s agreement to serve as a director or
officer of the Company and (2) in the case of a director or officer of
Holdings, the contribution of the proceeds generated by the IPO and the
services, guidance and other benefits such officer or director provides to the
Company, from and after the date hereof, the parties hereto agree as follows:

 

1.             Indemnity of Indemnitee. 
The Company hereby agrees to hold harmless and indemnify Indemnitee to
the fullest extent permitted by law, as such may be amended from time to
time.  In furtherance of the foregoing
indemnification, and without limiting the generality thereof:

 

(a)           Proceedings Other Than Proceedings by or in the Right
of the Company or Holdings.  Indemnitee
shall be entitled to the rights of indemnification provided in this Section l(a) if,
by reason of his Corporate Status, Indemnitee is, or is threatened to be made,
a party to or participant in any Proceeding other than a Proceeding by or in
the right of the Company or Holdings, applicable.  Pursuant to this Section 1(a),
Indemnitee shall be indemnified against all Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by him,
or on his behalf, in connection with such Proceeding or any claim, issue or
matter therein; provided, however no indemnification against such Expenses
shall be made if the liability was incurred because Indemnitee
breached or failed to perform a duty he owes to the Company or Holdings, as applicable, and the breach
or failure to perform constitutes any of the following:  (i) a willful failure to deal fairly
with the Company, Holdings or their shareholders in connection with a matter in
which Indemnitee has a material conflict of interest; 

 

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(ii) a violation of criminal law, unless Indemnitee had reasonable
cause to believe his conduct was lawful or no reasonable cause to believe his
conduct was unlawful; (iii) a transaction from which Indemnitee derived an
improper personal profit; or (iv) willful misconduct.

 

(b)           Proceedings by or in the Right of the Company or
Holdings.  Indemnitee shall be entitled to the rights of
indemnification provided in this Section 1(b) if, by reason of
his Corporate Status, Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding brought by or in the right of the Company or
Holdings, as applicable.  Pursuant to
this Section 1(b), Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by Indemnitee, or on Indemnitee’s
behalf, in connection with such Proceeding; provided, however no
indemnification against such Expenses shall be made if the liability
was incurred because Indemnitee breached or failed to perform a duty he owes to
the Company or
Holdings, as applicable, and the breach or failure to perform constitutes
any of the following:  (i) a willful
failure to deal fairly with the Company, Holdings or their shareholders in
connection with a matter in which Indemnitee has a material conflict of
interest; (ii) a violation of criminal law, unless Indemnitee had
reasonable cause to believe his conduct was lawful or no reasonable cause to
believe his conduct was unlawful; (iii) a transaction from which
Indemnitee derived an improper personal profit; or (iv) willful
misconduct.  The termination of a
proceeding by judgment, order, settlement or conviction, or upon a plea of no
contest or an equivalent plea, does not, by itself, create a presumption that
indemnification of Indemnitee is not required under this subsection.

 

(c)           Indemnification for Expenses of a Party Who is Wholly
or Partly Successful.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a party to and is successful, on the merits or otherwise, in any Proceeding, he
shall be indemnified to the maximum extent permitted by law, as such may be
amended from time to time, against all Expenses actually and reasonably
incurred by him or on his behalf 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 all Expenses actually and reasonably
incurred by him or on his behalf in connection with each successfully resolved
claim, issue or matter.  For purposes of
this Section 1(c) and without limitation, the termination of
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 claim, issue or
matter.

 

2.             Additional Indemnity. 
In addition to, and without regard to any limitations on, the
indemnification provided for in Section 1 of this Agreement, the
Company shall and hereby does indemnify and hold harmless Indemnitee against
all Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf if, by reason of his
Corporate Status, he is, or is threatened to be made, a party to or participant
in any Proceeding (including a Proceeding by or in the right of the Company
and/or Holdings, as applicable), including, without limitation, all liability
arising out of the negligence or active or passive wrongdoing of
Indemnitee.  The only limitation that
shall exist upon the Company’s obligations pursuant to this Agreement shall be
that the Company shall not be obligated to make any payment to Indemnitee that
is finally determined (under the procedures, and subject to the presumptions,
set forth in Sections 6 and 7 hereof) to be unlawful.

 

3

 

3.             Contribution.

 

(a)           Whether or not the indemnification provided in Sections
1 and 2 hereof is available, in respect of any threatened, pending
or completed Proceeding in which the Company and/or Holdings is jointly liable
with Indemnitee (or would be if joined in such Proceeding), the Company shall
pay, in the first instance, the entire amount of any judgment or settlement of
such action, suit or proceeding without requiring Indemnitee to contribute to
such payment and the Company hereby waives and relinquishes any right of
contribution it may have against Indemnitee. 
The Company shall not, without Indemnitee’s prior written consent, enter
into any such settlement of any Proceeding (in whole or in part) unless such
settlement (i) provides for a full and final release of all claims
asserted against Indemnitee and (ii) does not impose any Expense,
judgment, fine, penalty or limitation on Indemnitee.

 

(b)           Without diminishing or impairing the obligations of
the Company set forth in the preceding subparagraph, if, for any reason,
Indemnitee shall elect or be required to pay all or any portion of any judgment
or settlement in any threatened, pending or completed Proceeding in which the
Company and/or Holdings 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 and all officers, directors or
employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such Proceeding), 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 and/or Holdings and
all officers, directors or employees of the Company and/or Holdings other than
Indemnitee who are jointly liable with Indemnitee (or would be if joined in
such Proceeding), 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 which the law
may require to be considered.  The
relative fault of the Company and/or Holdings and all officers, directors or
employees of the Company and/or Holdings, other than Indemnitee, who are
jointly liable with Indemnitee (or would be if joined in such Proceeding), 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.

 

(c)           The Company hereby agrees to fully indemnify and hold
Indemnitee harmless from any claims of contribution which may be brought by
officers, directors or employees of the Company and/or Holdings, other than
Indemnitee, who may be jointly liable with Indemnitee.

 

(d)           To the fullest extent permissible under applicable
law, if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an 

 

4

 

indemnifiable
event under this Agreement, in such proportion as is deemed fair and reasonable
in light of all of the circumstances of such Proceeding in order to reflect (i) the
relative benefits received by the Company and Indemnitee as a result of the
event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company and/or Holdings (and their
respective directors, officers, employees and agents) and Indemnitee in
connection with such event(s) and/or transaction(s).

 

4.             Indemnification for Expenses of a Witness.  Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness, or is made (or asked to) respond to
discovery requests, in any Proceeding to which Indemnitee is not a party, he
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith.

 

5.             Advancement of Expenses. 
Notwithstanding any other provision of this Agreement, the Company shall
advance all Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30)
days after the receipt by the Company of a statement or statements from
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 reasonably
evidence the Expenses incurred by Indemnitee and shall include or be preceded
or accompanied by a written undertaking by or on behalf of Indemnitee to repay
any Expenses advanced if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses.  Any advances and undertakings to repay
pursuant to this Section 5 shall be unsecured and interest free.

 

6.             Procedures and Presumptions for
Determination of Entitlement to Indemnification.  It is the
intent of this Agreement to secure for Indemnitee rights of indemnity that are
as favorable as may be permitted under the WBCL and public policy of the State
of Wisconsin.  Accordingly, the parties
agree that the following procedures and presumptions shall apply in the event
of any question as to whether Indemnitee is entitled to indemnification under
this Agreement:

 

(a)           To obtain indemnification under this Agreement,
Indemnitee shall make a written request to the Company for indemnification, 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, which request shall designate one of the
following means for determining his right to indemnification:  (i) by a majority vote of a quorum of
the Board or a committee of directors, consisting of directors not at the time
parties to the same or related Proceedings; (ii) by Independent Counsel
selected by a quorum of the Board or its committee in the manner prescribed in
subsection (i) or, if unable to obtain such a quorum or committee, by
a majority vote of the full Board, including directors who are parties to the
same or related Proceedings; (iii) by a panel of three arbitrators
consisting of one arbitrator selected by those directors entitled under (ii) to
select Independent Counsel, one arbitrator selected by Indemnitee and one
arbitrator selected by the two arbitrators previously selected or (iv) by
the shareholders of the Company; provided, however, that if a Change in Control
has occurred, the determination with respect to Indemnitee’s entitlement to
indemnification shall be made by Independent Counsel.  Indemnitee may apply to a court of
competent jurisdiction for review of an adverse determination under this 

 

5

 

section. 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.  Notwithstanding the
foregoing, any failure of Indemnitee to provide such a request to the Company,
or to provide such a request in a timely fashion, shall not relieve the Company
of any liability that it may have to Indemnitee unless, and to the extent that,
such failure actually and materially prejudices the interests of the Company.

 

(b)           In the event the determination of entitlement to
indemnification is to be made by Independent Counsel, the Independent Counsel
shall be selected as provided in this Section 6(b).  If a Change in Control has not occurred the
Independent Counsel shall be selected by the Board (including a vote of a
majority of Disinterested Directors if obtainable), and the Company shall give
written notice to Indemnitee advising him of the identity of the Independent
Counsel so selected. Indemnitee may, within 10 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 Section 14 of 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 determined
that such objection is without merit.  If
a Change in Control has occurred, the Independent Counsel shall be selected by
the Indemnitee (unless the Indemnitee shall request that such selection be made
by the Board of Directors, in which event the preceding sentence shall apply),
and  approved by the Board of Directors
(which approval shall not be unreasonably withheld). If (i) an Independent
Counsel is to make the determination of entitlement pursuant to this Section 6,
and (ii) within 20 days after submission by Indemnitee of a written
request for indemnification pursuant to Section 6(a) hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the court conducting the Proceeding or
another court of competent jurisdiction in the State of Wisconsin for
resolution of any objection which shall have been made by Indemnitee to the
Company’s 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 respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 6(a) hereof.  The Company shall pay any and all reasonable
fees and expenses of Independent Counsel incurred by such Independent Counsel
in connection with acting pursuant to Section 6(a) hereof, and
the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 6(b), regardless of the manner in which
such Independent Counsel was selected or appointed.

 

(c)           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.  Anyone seeking to
overcome this presumption shall have the burden of proof and the burden of
persuasion by clear and convincing evidence. 
Neither the failure of the Company (including by its directors or
independent legal counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the 

 

6

 

Company (including
by its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.

 

(d)           Indemnitee shall be deemed to have acted in good faith
if Indemnitee’s action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Enterprise.  In addition, the
knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of
this Section 6(d) are satisfied, it shall in any event be
presumed that Indemnitee has at all times acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company or Holdings, as applicable. 
Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion by clear and convincing evidence.

 

(e)           If the person, persons or entity empowered or selected
under this Section 6 to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within sixty (60) days
after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been made
and Indemnitee shall be entitled to such indemnification absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material
fact necessary to make Indemnitee’s statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of
such indemnification under applicable law; provided, however, that such 60-day
period may be extended for a reasonable time, not to exceed an additional
thirty (30) days, if the person, persons or entity making such determination
with respect to entitlement to indemnification in good faith requires such
additional time to obtain or evaluate documentation and/or information relating
thereto; and provided, further, that the foregoing provisions of this Section 6(e) shall
not apply if the determination of entitlement to indemnification is to be made
by the shareholders pursuant to Section 6(a) of this Agreement
and if (A) within fifteen (15) days after receipt by the Company of the
request for such determination, the Board or the Disinterested Directors, if
appropriate, resolve to submit such determination to the shareholders for their
consideration at an annual meeting thereof to be held within seventy-five (75)
days after such receipt and such determination is made thereat, or (B) a
special meeting of shareholders is called within fifteen (15) days after such
receipt for the purpose of making such determination, such meeting is held for
such purpose within sixty (60) days after having been so called and such
determination is made thereat.

 

(f)            Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination.  Any Independent Counsel, member of the Board
or shareholder of the Company shall act reasonably and in good faith in making
a determination regarding Indemnitee’s entitlement to 

 

7

 

indemnification
under this Agreement.  Any costs or
expenses (including attorneys’ fees and disbursements) incurred by Indemnitee
in so cooperating with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.

 

(g)           The Company acknowledges that a settlement or other
disposition short of final judgment may be successful if it permits a party to
avoid expense, delay, distraction, disruption and uncertainty.  In the event that any action, claim or
proceeding to which Indemnitee is a party is resolved in any manner other than
by adverse judgment against Indemnitee (including, without limitation,
settlement of such action, claim or proceeding with or without payment of money
or other consideration) it shall be presumed that Indemnitee has been
successful on the merits or otherwise in such action, suit or proceeding.  Anyone seeking to overcome this presumption
shall have the burden of proof and the burden of persuasion by clear and
convincing evidence.

 

(h)           The termination of any Proceeding 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 (except as otherwise
expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company or Holdings, as applicable, or,
with respect to any criminal Proceeding, that Indemnitee had reasonable cause
to believe that his conduct was unlawful.

 

7.             Remedies of Indemnitee.

 

(a)           In the event that (i) a determination is made
pursuant to Section 6 of this Agreement that Indemnitee is not
entitled to indemnification under this Agreement, (ii) advancement of
Expenses is not timely made pursuant to Section 5 of this
Agreement, (iii) no determination of entitlement to indemnification is
made pursuant to Section 6(b) of this Agreement within 90 days
after receipt by the Company of the request for indemnification, (iv) payment
of indemnification is not made pursuant to this Agreement within ten (10) days
after receipt by the Company of a written request therefor or (v) payment
of indemnification is not made within ten (10) days after a determination
has been made that Indemnitee is entitled to indemnification or such
determination is deemed to have been made pursuant to Section 6 of
this Agreement, Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of Wisconsin, or in any other court of competent
jurisdiction, of Indemnitee’s entitlement to such indemnification, contribution
or advancement of Expenses. 
Alternatively, Indemnitee, at his option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association.  Except as set forth herein, the provisions of
Wisconsin law (without regard to its conflict of law rules) shall apply to any
such arbitration.  The Company shall not
oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.

 

(b)           In the event that a determination shall have been made
pursuant to Section 6(a) of this Agreement that Indemnitee is
not entitled to indemnification, any judicial 

 

8

 

proceeding
commenced pursuant to this Section 7 shall be conducted in all
respects as a de novo trial, or arbitration, on the merits, and Indemnitee
shall not be prejudiced by reason of the adverse determination under Section 6(a).  In any judicial proceeding or arbitration
commenced pursuant to this Section 7, Indemnitee shall be presumed
to be entitled to indemnification under this Agreement and the Company shall
have the burden of proving Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be, and the Company may not refer to
or introduce into evidence any determination pursuant to Section 6(a) of
this Agreement adverse to Indemnitee for any purpose.  If Indemnitee commences a judicial proceeding
or arbitration pursuant to this Section 7, Indemnitee shall not be
required to reimburse the Company for any advances pursuant to Section 5
until a final determination is made with respect to Indemnitee’s entitlement to
indemnification (as to which all rights of appeal have been exhausted or
lapsed).

 

(c)           If a determination shall have been made pursuant to Section 6(a) of
this Agreement that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding commenced
pursuant to this Section 7, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee’s misstatement not materially misleading in connection with the
application for indemnification, or (ii) a prohibition of such
indemnification under applicable law.

 

(d)           In the event that Indemnitee, pursuant to this Section 7,
seeks a judicial adjudication of his rights under, or to recover damages for
breach of, this Agreement, or to recover under any directors’ and officers’
liability insurance policies maintained by the Company, the Company shall pay
on his behalf, in advance, any and all expenses (of the types described in the
definition of Expenses in Section 14 of this Agreement) actually
and reasonably incurred by him in such judicial adjudication, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of expenses or insurance recovery.

 

(e)           The Company shall be precluded from asserting in any
judicial proceeding commenced pursuant to this Section 7 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Company is bound by
all the provisions of this Agreement. 
The Company shall indemnify Indemnitee against any and all Expenses and,
if requested by Indemnitee, shall (within ten (10) days after receipt by
the Company of a written request therefore) advance, to the extent not
prohibited by law, such expenses to Indemnitee, which are incurred by
Indemnitee in connection with any action brought by Indemnitee for
indemnification or advance of Expenses from the Company under this Agreement or
under any directors’ and officers’ liability insurance policies maintained by
the Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of Expenses or insurance
recovery, as the case may be.

 

(f)            Notwithstanding anything in this
Agreement to the contrary, no determination as to entitlement to
indemnification under this Agreement shall be required to be made prior to the
final disposition of the Proceeding.

 

9

 

 

8.             Non-Exclusivity; Survival of Rights;
Primacy of Indemnification; Subrogation.

 

(a)           The rights of indemnification and to receive
advancement of expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Charter, the By-Laws, any agreement, a vote of
shareholders, a resolution of directors or otherwise, of the Company or under
applicable law, the certificate of incorporation, the by-Laws, any agreement, a
vote of shareholders, a resolution of directors or otherwise, of Holdings, if
applicable.  No amendment, alteration or
repeal of this Agreement or of any provision hereof shall limit or restrict any
right of Indemnitee under this Agreement in respect of any action taken or
omitted by such Indemnitee in his Corporate Status prior to such amendment,
alteration or repeal.  To the extent that
a change in the WBCL, whether by statute or judicial decision, permits greater
indemnification than would be afforded currently under the Charter, By-Laws and
this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.

 

(b)           The Company hereby acknowledges that Indemnitee has
certain rights to indemnification, advancement of expenses and/or insurance
provided by CCMP and certain affiliates that, directly or indirectly, (i) are
controlled by, (ii) control or (iii) are under common control with,
CCMP (collectively, the “Fund Indemnitors”).  The Company hereby agrees (i) that it is
the indemnitor of first resort (i.e., its obligations to Indemnitee are primary
and any obligation of the Fund Indemnitors to advance expenses or to provide
indemnification for the same expenses or liabilities incurred by Indemnitee are
secondary), (ii) that it shall be required to advance the full amount of
expenses incurred by Indemnitee and shall be liable for the full amount of all
Expenses, judgments, penalties, fines and amounts paid in settlement to the
extent legally permitted and as required by the terms of this Agreement and the
Charter or By-Laws of the Company (or any other agreement between the Company
and Indemnitee), without regard to any rights Indemnitee may have against the
Fund Indemnitors, and, (iii)  that it irrevocably waives, relinquishes and
releases the Fund Indemnitors from any and all claims against the Fund
Indemnitors for contribution, subrogation or any other recovery of any kind in
respect thereof.  The Company further
agrees that no advancement or payment by the Fund Indemnitors on behalf of
Indemnitee with respect to any claim for which Indemnitee has sought
indemnification from the Company shall affect the foregoing and the Fund
Indemnitors shall have a right of contribution and/or be subrogated to the
extent of such advancement or payment to all of the rights of recovery of
Indemnitee against the Company.  The
Company and Indemnitee agree that the Fund Indemnitors are express third party
beneficiaries of the terms of this Section 8(b).

 

(c)           Except as provided in Section 8(b) above,
in the event of any payment under this Agreement, the Company 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 take all 

 

10

 

action necessary
to secure such rights, including execution of such documents as are necessary
to enable the Company to bring suit to enforce such rights.

 

(d)           Except as provided in Section 8(b) above,
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.

 

(e)           Except as provided in Section 8(b) above,
the Company’s obligation to indemnify or advance Expenses hereunder to
Indemnitee who is or was serving at the request of the Company and/or Holdings
as a director, officer, employee or agent of any other corporation,
partnership, joint venture, trust, employee benefit plan or other Enterprise
shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.

 

9.             Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:

 

(a)           for which payment has actually been made to or on
behalf of Indemnitee under any insurance policy or other indemnity provision,
except with respect to any excess beyond the amount paid under any insurance
policy or other indemnity provision; provided, that the foregoing shall not
affect the rights of Indemnitee or the Fund Indemnitees set forth in Section 8(b) above;

 

(b)           for (i) an accounting of profits
made from the purchase and sale (or sale and purchase) by Indemnitee of
securities of the Company within the meaning of Section 16(b) of the
Exchange Act, or similar provisions of state statutory law or common law or (ii) reimbursement
to the Company of any bonus or other incentive-based or equity-based
compensation or of any profits realized by Indemnitee from the sale of
securities of the Company in each case as required under the Exchange Act; or

 

(c)           in connection with any Proceeding (or any
part of any Proceeding) initiated by Indemnitee, including any Proceeding (or
any part of any Proceeding) initiated by Indemnitee against the Company and/or
Holdings or their respective directors, officers, employees or other
indemnitees, unless (i) the Company has joined in or the Board authorized
the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) the
Company provides the indemnification, in its sole discretion, pursuant to the
powers vested in the Company under applicable law, or (iii) the Proceeding
is one to enforce Indemnitee’s rights under this  Agreement.

 

10.           Non–Disclosure of Payments. Except as expressly
required by the securities laws of the United States of America, neither party shall
disclose any payments under this Agreement unless prior approval of the other
party is obtained. If any payment information must be disclosed, the Company
shall afford Indemnitee an opportunity to review all such 

 

11

 

disclosures and,
if requested, to explain in such statement any mitigating circumstances
regarding the events to be reported.

 

11.           Duration of Agreement. 
All agreements and obligations of the Company contained herein shall
continue upon the later of (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director or officer of the Company
or a director, officer, trustee, partner, managing member, fiduciary, employee
or agent of any other corporation, partnership, joint venture, trust, employee
benefit plan or other Enterprise which Indemnitee served at the request of the
Company and/or Holdings; or (b) one (1) year after the final
termination of any Proceeding (including any rights of appeal thereto) in
respect of which Indemnitee is granted rights of indemnification or advancement
of Expenses hereunder and of any Proceeding commenced by Indemnitee pursuant to
Section 7 of this Agreement relating thereto (including any rights
of appeal of any Section 7 Proceeding.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company), assigns, spouses, heirs, executors and personal and
legal representatives.

 

12.           Security.  To the extent
requested by Indemnitee and approved by the Board, the Company may at any time
and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral.  Any such security,
once provided to Indemnitee, may not be revoked or released without the prior
written consent of Indemnitee.

 

13.           Enforcement.

 

(a)           The Company expressly confirms and agrees that it has
entered into this Agreement and assumes the obligations imposed on it hereby in
order to induce Indemnitee to serve as an officer, director or key employee of
the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer, director or key employee of the Company.

 

(b)           Without limiting any of the rights of Indemnitee under
the Charter of By-Laws of the Company as they may be amended from time to time,
this Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.

 

14.           Definitions. 
For purposes of this Agreement:

 

(a)           “Beneficial Owner” shall have the meaning given
to such term in Rule 13d-3 under the Exchange Act; provided, however, that
Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner
by reason of the shareholders of the Company or Holdings, as applicable,
approving a merger of the Company or Holdings, as applicable, with another
entity.

 

(b)           “Change in Control” shall be deemed to occur
upon the earliest to occur after the date of this Agreement of any of the
following events:

 

12

 

(i)  Acquisition of Stock by
Third Party.  Any Person (as
defined below), other than CCMP and its affiliates and other than a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or Holdings, as applicable, or a corporation owned directly or
indirectly by the shareholders of the Company or Holdings, as applicable, in
substantially the same proportions as their ownership of stock of the Company
or Holdings, as applicable,  is or
becomes the Beneficial Owner (as defined above), directly or indirectly, of
securities of the Company or Holdings representing fifty (50%) or more of the
combined voting power of the Company’s or Holding’s, as applicable, then
outstanding securities;

 

(ii)  Change in Board of
Directors.  During any period
of two (2) consecutive years (not including any period prior to the execution
of this Agreement), individuals who at the beginning of such period constitute
the board of directors of Holdings (the “Holdings Board”), and any new
director (other than a director designated by a person who has entered into an
agreement with Holdings of the Company, as applicable, to effect a transaction
described in Section 14(b)(i), 14(b)(iii) or 14(b)(iv))
whose election by the Holdings Board or nomination for election by Holdings’
stockholders was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of the period
or whose election or nomination for election was previously so approved, cease
for any reason to constitute a least a majority of the members of the Holdings’
Board;

 

(iii)  Corporate Transactions. 
The effective date of a merger or consolidation of the Company or
Holdings with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company or Holdings outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity) more than 51% of the combined voting power of the
voting securities of the surviving entity outstanding immediately after such
merger or consolidation and with the power to elect at least a majority of the
board of directors or other governing body of such surviving entity; and

 

(iv)  Liquidation.  The approval
by the shareholders of the Company of a complete liquidation of the Company or
an agreement or series of agreements for the sale or disposition by the Company
of all or substantially all of the Company’s assets, or, if such approval is
not required, the decision by the Board to proceed

 

13

 

with such a liquidation, sale, or disposition in one
transaction or a series of related transactions.

 

(c)           “Corporate
Status” describes the status of a person who is or was a director,
officer, employee, agent or fiduciary of the Company and/or Holdings, any
direct or indirect subsidiary of the Company and/or Holdings, or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person is or was serving at the request of the Company
and/or Holdings.

 

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

 

(e)           “Enterprise”
shall mean the Company, Holdings and any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise that Indemnitee is or
was serving at the request of the Company as a director, officer, employee,
agent or fiduciary.

 

(f)            “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.

 

(g)           “Expenses”
shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, 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 prosecuting, defending, preparing to prosecute or defend,
investigating, participating, or being or preparing to be a witness in a
Proceeding, or responding to, or objecting to, a request to provide discovery
in any Proceeding.  Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding and any federal, state, local or foreign taxes imposed on Indemnitee
as a result of the actual or deemed receipt of any payments under this
Agreement, including without limitation the premium, security for, and other
costs relating to any cost bond, supersede as bond, or other appeal bond or its
equivalent.  Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.

 

(h)           “Independent
Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the
past five years has been, retained to represent:  (i) the Company, Holdings or Indemnitee
in any matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company, Holdings or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees
of the Independent Counsel referred to above and to fully indemnify such
counsel against 

 

14

 

any and all
Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

 

(i)            “Person” shall have the meaning as set forth in
Sections 13(d) and 14(d) of the Exchange Act; provided, however, that
Person shall exclude (i) the Company, (ii) Holdings, (iii) any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, and (iv) any corporation owned, directly or indirectly, by
the shareholders of the Company or Holdings in substantially the same
proportions as their ownership of stock of the Company or Holdings.

 

(j)            “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
brought by or in the right of the Company or Holdings or otherwise and whether
civil, criminal, administrative or investigative, in which Indemnitee was, is
or will be involved as a party or otherwise, by reason of the fact that
Indemnitee is or was an officer or director of the Company or Holdings, by
reason of any action taken by him or of any inaction on his part while acting
as an officer or director of the Company or Holdings, or by reason of the fact
that he is or was serving at the request of the Company or Holdings as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other Enterprise; in each case whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement; 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 his rights under this Agreement.

 

15.           Severability. 
If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (a) the
validity, legality, and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section,
paragraph or sentence of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; (b) such
provision or provisions shall be deemed reformed to the fullest extent
necessary to conform to applicable law and to give the maximum effect to the
intent of the parties hereto; and (c) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
any Section, paragraph or sentence of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.  Without
limiting the generality of the foregoing, this Agreement is intended to confer
upon Indemnitee indemnification rights to the fullest extent permitted by
applicable laws.

 

16.           Enforcement and Binding Effect.

 

(a)           The indemnification and advancement of expenses
provided by, or granted pursuant to this Agreement shall be binding upon and be
enforceable by the parties hereto and their respective successors and assigns
(including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of 

 

15

 

the Company),
shall continue as to an Indemnitee who has ceased to be a director, officer,
employee or agent of the Company, Holdings or of any other Enterprise at the
Company’s or Holding’s request, and shall inure to the benefit of Indemnitee
and his or her spouse, assigns, heirs, devisees, executors and administrators
and other legal representatives.

 

(b)           The Company shall require and cause any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all, substantially all or a substantial part, of the business and/or assets of
the Company to expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform if no such succession had taken place.

 

(c)           The Company and Indemnitee agree herein that a
monetary remedy for breach of this Agreement, at some later date, may be
inadequate, impracticable and difficult of proof, and further agree that such
breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto
agree that Indemnitee may enforce this Agreement by seeking injunctive relief
and/or specific performance hereof, without any necessity of showing actual damage
or irreparable harm and that by seeking injunctive relief and/or specific
performance, Indemnitee shall not he precluded from seeking or obtaining any
other relief to which he may be entitled. The Company and Indemnitee further
agree that Indemnitee shall be entitled to such specific performance and
injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of posting bonds
or other undertaking in connection therewith. The Company acknowledges that in
the absence of a waiver, a bond or undertaking may be required of Indemnitee by
the Court, and the Company hereby waives any such requirement of such a bond or
undertaking.

 

17.           Modification and Waiver. 
No supplement, modification, termination 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.

 

18.           Notice By Indemnitee. 
Indemnitee agrees promptly to notify the Company in writing upon being
served with or otherwise receiving any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification covered hereunder.  The failure to so notify the Company shall
not relieve the Company of any obligation which it may have to Indemnitee under
this Agreement or otherwise.

 

19.           Notices.  All notices
and other communications given or made pursuant to this Agreement shall be in
writing and shall be deemed effectively given: 
(a) upon personal delivery to the party to be notified, (b) when
sent by confirmed electronic mail or facsimile if sent during normal business
hours of the recipient, and if not so confirmed, then on the next business day,
(c) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.  All communications shall be sent:

 

16

 

(a)           To Indemnitee at the address set forth below
Indemnitee signature hereto.

 

(b)           To the Company at:

 

Generac Power Systems, Inc.

S45 W29290 Hwy. 59

Waukesha, WI 53187

Attention: Chief
Executive Officer

 

or to such other
address as may have been furnished to Indemnitee by the Company or to the
Company by Indemnitee, as the case may be.

 

20.           Counterparts. 
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same Agreement.  This
Agreement may also be executed and delivered by facsimile signature and in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

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

 

22.           Usage of Pronouns. 
Use of the masculine pronoun shall be deemed to include usage of the
feminine pronoun where appropriate.

 

23.           Governing Law and Consent to Jurisdiction. 
This Agreement and the legal relations among the parties shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Wisconsin, without regard to its conflict of laws rules. The Company
and Indemnitee hereby irrevocably and unconditionally (i) agree that any
action or proceeding arising out of or in connection with this Agreement shall
be brought only in a court of the State of Wisconsin located in Milwaukee,
Wisconsin (the “Wisconsin Court”),
and not in any other state or federal court in the United States of America or
any court in any other country, (ii) generally and unconditionally consent
to submit to the exclusive jurisdiction of the Wisconsin Court for purposes of
any action or proceeding arising out of or in connection with this Agreement, (iii) waive
any objection to the laying of venue of any such action or proceeding in the
Wisconsin Court, and (iv) waive, and agree not to plead or to make, any
claim that any such action or proceeding brought in the Wisconsin Court has
been brought in an improper or inconvenient forum.  The foregoing consent to jurisdiction shall
not constitute general consent to service of process in the state for any
purpose except as provided above, and shall not be deemed to confer rights on
any person other than the parties to this Agreement.

 

[SIGNATURE PAGE TO FOLLOW]

 

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

 

 

	
   

  	
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  INDEMNITEE

  

  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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