EXHIBIT 10.12
INDEMNIFICATION AGREEMENT
This Agreement is made as of the _____ day of __________, 2002, by and
between Nashua Corporation, a Massachusetts corporation (the "Corporation"), and
________________ ("Indemnitee"), a director or officer of the Corporation.
WHEREAS, it is essential to the Corporation to retain and attract as
directors and officers the most capable persons available, and
WHEREAS, the substantial increase in corporate litigation subjects
directors and officers to expensive litigation risks at the same time that the
availability of directors' and officers' liability insurance has been severely
limited, and
WHEREAS, it is now and has always been the express policy of the
Corporation to indemnify its directors and officers so as to provide them with
the maximum possible protection permitted by law, and
WHEREAS, Indemnitee does not regard the protection available under the
Corporation's Articles of Organization and insurance as adequate in the present
circumstances, and may not be willing to serve or continue to serve as a
director or officer without adequate protection, and
WHEREAS, the Corporation desires Indemnitee to serve, or continue to serve,
as a director or officer of the Corporation.
NOW THEREFORE, the Corporation and Indemnitee do hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve or continue to serve as
a director or officer of the Corporation for so long as Indemnitee is duly
elected or appointed or until such time as Indemnitee tenders Indemnitee's
resignation in writing.
2. DEFINITIONS. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, alternative dispute resolution proceeding,
administrative hearing or other proceeding, whether brought by or in the right
of the Corporation or otherwise and whether of a civil, criminal, administrative
or investigative nature, and any appeal therefrom.
(b) The term "Corporate Status" shall mean the status of a person who
is or was a director or officer of the Corporation, or is or was serving, or has
agreed to serve, at the request of the Corporation, as a director, officer,
partner, trustee, member, employee or agent of another corporation, partnership,
joint venture, trust, limited liability company or other enterprise.
(c) The term "Expenses" shall include, without limitation, attorneys'
fees, retainers, court costs, transcript costs, fees and expenses of experts,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees and other disbursements or expenses of
the types customarily incurred in connection with investigations, judicial or
administrative proceedings or appeals, but shall not include the amount of
judgments, fines or penalties against Indemnitee or amounts paid in settlement
in connection with such matters.
(d) References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with respect
to any employee benefit plan; references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or
agent of the Corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants, or beneficiaries; and a person who acted in good faith and in
a manner such person reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "in the best interests of the Corporation" as referred to
in this Agreement.
3. INDEMNIFICATION. The Corporation shall indemnify Indemnitee in
accordance with the provisions of this Paragraph 3 if Indemnitee was or is a
party to or threatened to be made a party to or otherwise involved in any
Proceeding by reason of the Indemnitee's Corporate Status or by reason of any
action alleged to have been taken or omitted in connection therewith, against
all Expenses, judgments, fines and penalties incurred by Indemnitee or on his
behalf in connection with such Proceeding, unless the Indemnitee shall be
finally adjudicated in such Proceeding not to have acted in good faith in the
reasonable belief that Indemnitee's action was in the best interests of the
Corporation or, to the extent such matter relates to service with respect to an
employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan. The termination of any Proceeding
by judgment, order, settlement, conviction or upon a plea of NOLO CONTENDERE or
its equivalent, shall not, in itself, create a presumption that Indemnitee did
not act in good faith in the reasonable belief that Indemnitee's action was in
the best interest of the Corporation or, to the extent such matter relates to
service with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
4. SETTLEMENTS. The right to indemnification conferred in this Agreement
shall include the right to be paid by the Corporation for amounts paid in
settlement of any Proceeding, and all Expenses incurred in connection with such
settlement, pursuant to a consent decree or otherwise, unless and to the extent
it is determined pursuant to Paragraph 8 below that the Indemnitee did not act
in good faith in the reasonable belief that his action was in the best interests
of the Corporation or, to the extent such matter relates to service with respect
to an employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan.
5. EXCEPTIONS TO RIGHT OF INDEMNIFICATION. Notwithstanding anything to
the contrary in this Agreement, except as set forth in Paragraph 9, the
Corporation shall not indemnify the Indemnitee in connection with a Proceeding
(or part thereof) initiated by the Indemnitee unless the initiation thereof was
approved by the Board of Directors of the Corporation. Notwithstanding anything
to the contrary in this Agreement, the Corporation shall not indemnify the
Indemnitee to the extent the Indemnitee is reimbursed from the proceeds of
insurance, and in the event the Corporation makes any indemnification payments
to the Indemnitee and the Indemnitee is subsequently reimbursed from the
proceeds of insurance, the Indemnitee shall promptly refund such indemnification
payments to the Corporation to the extent of such insurance reimbursement.
6. NOTIFICATION AND DEFENSE OF CLAIM. As a condition precedent to his
right to be indemnified, the Indemnitee must notify the Corporation in writing
as soon as practicable of any Proceeding for which indemnity will or could be
sought by him and provide the Corporation with a copy of any summons, citation,
subpoena, complaint, indictment, information or other document relating to such
Proceeding with which he is served. With respect to any Proceeding of which the
Corporation is so notified, the Corporation will be entitled to participate
therein at its own expense and/or to assume the defense thereof at its own
expense, with legal counsel reasonably acceptable to the Indemnitee. After
notice from the Corporation to the Indemnitee of its election so to assume such
defense, the Corporation shall not be liable to the Indemnitee for any fees or
expenses of counsel subsequently incurred by the Indemnitee in connection with
such claim, other than as provided below in this Paragraph 6. The Indemnitee
shall have the right to employ his own counsel in connection with such claim,
but the fees and expenses of such counsel incurred after notice from the
Corporation of its assumption of the defense thereof shall be at the expense of
the Indemnitee unless (i) the employment of counsel by the Indemnitee
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has been authorized by the Corporation, (ii) counsel to the Indemnitee shall
have reasonably concluded that there may be a conflict of interest or position
on any significant issue between the Corporation and the Indemnitee in the
conduct of the defense of such action or (iii) the Corporation shall not in fact
have employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of counsel for the Indemnitee shall be at the
expense of the Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled, without the consent of the
Indemnitee, to assume the defense of any claim brought by or in the right of the
Corporation or as to which counsel for the Indemnitee shall have reasonably made
the conclusion provided for in clause (ii) above. The Corporation shall not be
required to indemnify the Indemnitee under this Agreement for any amounts paid
in settlement of any Proceeding effected without its written consent. The
Corporation shall not settle any Proceeding in any manner which would impose any
penalty (monetary or otherwise) or limitation on Indemnitee, or admit any
liability or wrongdoing on the part of Indemnitee, without Indemnitee's written
consent. The Corporation will not unreasonably withhold its consent to any
proposed settlement.
7. ADVANCEMENT OF EXPENSES. Subject to the provisions of Paragraph 6
above and Paragraph 8 below, any Expenses incurred by or on behalf of the
Indemnitee in defending such Proceeding shall be paid by the Corporation in
advance of the final disposition of such Proceeding; PROVIDED, HOWEVER, that the
payment of such Expenses incurred by or on behalf of the Indemnitee in advance
of the final disposition of such Proceeding shall be made only upon receipt of
an undertaking by or on behalf of the Indemnitee to repay all amounts so
advanced in the event that it shall ultimately be determined that the Indemnitee
is not entitled to be indemnified by the Corporation as authorized in this
Agreement. Such undertaking shall be accepted without reference to the financial
ability of the Indemnitee to make repayment.
8. PROCEDURE FOR INDEMNIFICATION. In order to obtain indemnification or
advancement of Expenses pursuant to Paragraphs 3, 4 or 7 of this Agreement,
Indemnitee shall submit to the Corporation a written request, including in such
request 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 or advancement of Expenses. Any such
indemnification or advancement of Expenses shall be made promptly, and in any
event within 60 days after receipt by the Corporation of the written request of
the Indemnitee, unless the Corporation determines within such 60-day period that
such Indemnitee did not meet the applicable standard of conduct set forth in
Paragraph 3 or 4, as the case may be. Such determination, and any determination
that advanced Expenses must be repaid to the Corporation, shall be made in each
instance by (a) a majority vote of a quorum of the directors of the Corporation,
(b) a majority vote of a quorum of the outstanding shares of stock of all
classes entitled to vote for directors, voting as a single class, which quorum
shall consist of shareholders who are not at that time parties to the
Proceeding, (c) if there is no quorum of the directors of the Corporation, or if
the directors so direct, independent legal counsel (who may, to the extent
permitted by applicable law, be regular legal counsel to the Corporation) in a
written opinion to the Board, or (d) a court of competent jurisdiction.
9. REMEDIES. The right to indemnification or advancement of Expenses as
provided by this Agreement shall be enforceable by the Indemnitee in any court
of competent jurisdiction if the Corporation denies such request, in whole or in
part, or if no disposition thereof is made within the 60-day period referred to
above in Paragraph 8. Unless otherwise required by law, the burden of proving
that indemnification is not appropriate shall be on the Corporation. Neither the
failure of the Corporation to have made a determination prior to the
commencement of such action that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Corporation pursuant to Paragraph 8 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. Indemnitee's expenses (of the type
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described in the definition of "Expenses" in Paragraph 2(c)) reasonably incurred
in connection with successfully establishing his right to indemnification, in
whole or in part, in any such Proceeding shall also be indemnified by the
Corporation.
10. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Corporation for some or a portion of
the Expenses, judgments, fines, penalties or amounts paid in settlement actually
and reasonably incurred by him or on his behalf in connection with any
Proceeding but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify Indemnitee for the portion of such Expenses, judgments,
fines, penalties or amounts paid in settlement to which Indemnitee is entitled.
11. SUBROGATION. In the event of any payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
12. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification and
advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under the Articles of
Organization, the By-Laws, any agreement, any vote of shareholders or directors,
the Massachusetts Business Corporation Law, any other law (common or statutory),
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding office for the Corporation. Nothing contained in
this Agreement shall be deemed to prohibit the Corporation from purchasing and
maintaining insurance, at its expense, to protect itself or the Indemnitee
against any expense, liability or loss incurred by it or him in any such
capacity, or arising out of his status as such, whether or not the Indemnitee
would be indemnified against such expense, liability or loss under this
Agreement; provided that the Corporation 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.
13. NO SPECIAL RIGHTS. Nothing contained herein shall confer upon
Indemnitee any right to continue to serve as an officer or director of the
Corporation for any period of time, or at any particular rate of compensation.
14. SAVINGS CLAUSE. If this Agreement or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the fullest extent permitted by
applicable law.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall constitute the original.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Corporation and its successors and assigns and shall inure to the benefit of the
estate, heirs, executors, administrators and personal representatives of
Indemnitee.
17. 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.
18. MODIFICATION AND WAIVER. This Agreement may be amended from time to
time to reflect changes in Massachusetts law or for other reasons. No
supplement, modification or amendment of this
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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 provision hereof nor shall any such
waiver constitute a continuing waiver.
19. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given (i) when
delivered by hand or (ii) if mailed by certified or registered mail with postage
prepaid, on the third day after the date on which it is so mailed:
(a) if to the Indemnitee, to:
[ ]
(b) if to the Corporation, to:
Nashua Corporation
11 Trafalgar Square, 2nd Floor
Nashua, New Hampshire 03063
Attention: Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
20. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
21. ENFORCEMENT. The Corporation expressly confirms and agrees that it has
entered into this Agreement in order to induce Indemnitee to continue to serve
as a director of the Corporation, and acknowledges that Indemnitee is relying
upon this Agreement in continuing in such capacity.
22. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supercedes all prior agreements, whether oral or written, by any officer,
employee or representative of any party hereto in respect of the subject matter
contained herein; and any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and cancelled. For
avoidance of doubt, the parties confirm that the foregoing does not apply to or
limit the Indemnitee's rights under Massachusetts law or the Corporation's
Articles of Organization or bylaws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ATTEST: NASHUA CORPORATION
By_________________________ By_________________________
Name: Name:
Title: Title:
INDEMNITEE
___________________________
Name:
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