EXHIBIT 10.25
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT ("Agreement") is made as of ___________,
1998, by and between FAMILY CHRISTIAN STORES, INC., a Michigan corporation
(the "Corporation"), and ______________________ ("Indemnitee").
It is essential to the Corporation to attract and retain as
directors and executive officers the most capable persons available. The
substantial increase in corporate litigation subjects directors and
executive officers to expensive litigation risks at the same time that the
availability and coverage of directors and officers liability insurance has
been limited. It is the express policy of the Corporation to indemnify its
directors and executive officers so as to provide them with the maximum
possible protection permitted by law, and in furtherance of that policy and
in consideration of Indemnitee's agreement to serve as a director or
executive officer of the Corporation, the parties are entering into this
Agreement.
ACCORDINGLY, the parties agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement:
(a) "Expenses" means all costs, expenses and obligations paid or
incurred in connection with investigating, litigating, being a witness
in, defending or participating in, or preparing to litigate, defend,
be a witness in or participate in any matter that is the subject of a
Proceeding (as defined below), including attorneys' and accountants'
fees and court costs.
(b) "Proceeding" means any threatened, pending or completed
action, suit or proceeding, or any inquiry or investigation, whether
brought by or in the right of the Corporation or otherwise and whether
of a civil, criminal, administrative or investigative nature, in which
Indemnitee may be or may have been involved as a party or otherwise by
reason of the fact that Indemnitee is or was a director, officer,
employee, agent or fiduciary of the Corporation, or by reason of any
action taken by Indemnitee or any inaction on Indemnitee's part while
acting as a director, officer, employee, agent or fiduciary of the
Corporation, or by reason of the fact that Indemnitee is or was
serving at the request of the Corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, trust or other enterprise.
(c) "Resolution Costs" includes any amount paid in connection
with a Proceeding in satisfaction of a judgment, fine, penalty or any
amount paid in settlement.
SECTION 2. AGREEMENT TO SERVE. Indemnitee agrees to serve as a
director or officer of the Corporation for so long as Indemnitee is duly
elected or appointed or until the tender of Indemnitee's written
resignation.
SECTION 3. INDEMNIFICATION. The Corporation shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by
Indemnitee in connection with any Proceeding. Additionally, the
Corporation shall indemnify Indemnitee against all Resolution Costs
actually and reasonably incurred by Indemnitee in connection with any
Proceeding. It is the intent of the parties to provide Indemnitee, to the
fullest extent allowed by law as now or later enacted or interpreted, with
indemnification against any Expenses and Resolution Costs incurred by
Indemnitee in connection with any Proceeding. To the extent a change in
the laws of the state of Michigan (whether by statute or judicial decision)
permits greater indemnification, either by agreement or otherwise, than
presently provided by law or this Agreement, it is the intent of the
parties that Indemnitee shall enjoy by this Agreement the greater benefits
afforded by the change. Notwithstanding the foregoing, no indemnification
shall be made under this Agreement:
(a) with respect to remuneration paid to Indemnitee if the
remuneration was in violation of law;
(b) on account of Indemnitee's conduct that was knowingly
fraudulent, deliberately dishonest or willful misconduct;
(c) on account of Indemnitee's conduct that was an intentional
infliction of harm on the Corporation or its shareholders or an
intentional criminal act;
(d) if a final decision by a court having jurisdiction in the
matter determines that indemnification under this Agreement is not
lawful; or
(e) in connection with any Proceeding initiated by Indemnitee
against the Corporation or any director, officer, employee, agent or
fiduciary of the Corporation (in such capacity) unless the Corporation
has joined in or consented to the initiation of the Proceeding or such
Proceeding relates to the enforcement by Indemnitee of Indemnitee's
rights under this Agreement.
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SECTION 4. PAYMENT OF INDEMNIFICATION.
(a) Expenses incurred by Indemnitee and subject to
indemnification under Section 3 above shall be paid directly by the
Corporation within five (5) days after the receipt of a written
request of Indemnitee setting forth in reasonable detail the amount
requested and accompanied by copies of relevant invoices or other
documentation. Resolution Costs incurred by Indemnitee and subject to
indemnification under Section 3 above shall be paid directly by the
Corporation within thirty (30) days after the receipt of a written
request of Indemnitee setting forth in reasonable detail the amount
requested and accompanied by relevant invoices or other documentation.
Indemnitee's request for indemnification must be accompanied by a
signed certificate that Indemnitee in good faith believes that he or
she is entitled to indemnification in accordance with the requirements
of this Agreement. If Indemnitee certifies that Indemnitee in good
faith believes that he or she is entitled to indemnification under
this Agreement, Indemnitee will be deemed to have met the necessary
standard of conduct unless and until it is determined by a final
judgment or other final adjudication that Indemnitee is not entitled
to indemnification.
(b) Indemnitee agrees to promptly repay any amounts paid or
advanced under this Agreement to the extent that it is ultimately
determined in accordance with Section 4(a) above that Indemnitee is
not entitled to indemnification of such amounts under this Agreement
and amounts advanced to cover Expenses which Indemnitee does not in
fact incur.
(c) The Corporation shall take all actions necessary to enable
it to indemnify Indemnitee under this Agreement. The right to
indemnification payments as provided by this Agreement shall be
enforceable by Indemnitee in any court of competent jurisdiction. The
burden of proving that indemnification is not permitted by this
Agreement shall be on the Corporation or on the person challenging the
indemnification. Neither the failure of the Corporation, including
its Board of Directors, to have made a determination before the
commencement of any Proceeding that indemnification is proper, nor an
actual determination by the Corporation, including its Board of
Directors or legal counsel, that indemnification is not proper, shall
bar an action by Indemnitee to enforce this Agreement or create a
presumption that Indemnitee is not entitled to indemnification under
this Agreement. Expenses incurred by Indemnitee in connection with
successfully establishing Indemnitee's right to indemnification, in
whole or in part, also shall be fully reimbursed by the Corporation.
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SECTION 5. DEFENSE OF CLAIM.
(a) The Corporation, jointly with any other indemnifying party,
shall be entitled to assume the defense of any Proceeding as to which
Indemnitee requests indemnification. After notice from the
Corporation to Indemnitee of its election to assume the defense of a
Proceeding, the Corporation shall not be liable to Indemnitee under
this Agreement for any legal or other Expenses subsequently incurred
by Indemnitee in connection with the defense of such matter other than
reasonable costs of investigation or as otherwise provided in
subsection (c) below.
(b) Except as provided in Section 5(c) below, the Corporation
need not, in any action or actions, employ or approve the employment
of more than one counsel to represent Indemnitee and any other
director, officer or other party entitled to indemnification pursuant
to an agreement similar to this Agreement or otherwise.
(c) Indemnitee may employ his or her own counsel in a Proceeding
and be indemnified therefor if (i) the Corporation approves, in
writing, the employment of such counsel, or (ii) either (A) Indemnitee
has reasonably concluded that there are conflicts of interest between
the Corporation and Indemnitee or between Indemnitee and other parties
represented by counsel employed by the Corporation to represent
Indemnitee in the Proceeding, or (B) the Corporation has not employed
counsel to assume the defense of the Proceeding.
SECTION 6. PARTIAL INDEMNIFICATION; SUCCESSFUL DEFENSE. If
Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the Expenses or
Resolution Costs actually and reasonably incurred by Indemnitee but not,
however, for the total amount, the Corporation shall nevertheless indemnify
Indemnitee for the portion of the Expenses or Resolution Costs to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the
merits or otherwise in defense of any or all claims relating in whole or in
part to a Proceeding or in defense of any issue or matter in a Proceeding,
including dismissal with or without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection with that
Proceeding.
SECTION 7. CONSENT. Neither party may settle any Proceeding
without the other's written consent, and the Corporation shall not be
liable to indemnify Indemnitee under this Agreement for amounts paid in
settlement of a Proceeding made without the Corporation's written consent.
Neither the Corporation nor Indemnitee will unreasonably withhold consent
to any proposed settlement.
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SECTION 8. SEVERABILITY. If this Agreement or any portion of this
Agreement (including any provision within a single section, subsection or
sentence) shall be held to be invalid, void or otherwise unenforceable on
any ground by any court of competent jurisdiction, the Corporation shall
nevertheless indemnify Indemnitee as to any Expenses or Resolution Costs
with respect to any Proceeding to the full extent permitted by law or any
applicable portion of this Agreement that shall not have been invalidated,
declared void or otherwise held to be unenforceable.
SECTION 9. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The
indemnification provided by this Agreement shall be in addition to any
other rights that Indemnitee may be entitled under the Corporation's
Restated Articles of Incorporation, the Bylaws, any agreement, any vote of
shareholders or the Board of Directors, the Michigan Business Corporation
Act or otherwise.
SECTION 10. NO PRESUMPTION. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon
a plea of nolo contendere, or its equivalent, shall not create a
presumption that Indemnitee did not meet any particular standard of conduct
or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
SECTION 11. SUBROGATION. In the event of payment under this
Agreement, the Corporation shall be subrogated to the extent of the payment
to all of the rights of recovery of Indemnitee, who shall execute all
documents required and shall do everything that may be necessary to secure
those rights, including the execution of all documents necessary to enable
the Corporation to effectively bring suit to enforce those rights.
SECTION 12. NO DUPLICATION OF PAYMENT. The Corporation shall not
be liable under this Agreement to make any payment to the extent Indemnitee
has otherwise actually received payment (under any insurance policy, Bylaw
or otherwise) of the amounts otherwise indemnifiable under this Agreement.
SECTION 13. NOTICE. Indemnitee shall, as a condition precedent to
his or her right to be indemnified under this Agreement, give to the
Corporation notice in writing as soon as practicable of any claim for which
indemnity will or could be sought under this Agreement. Notice to the
Corporation shall be directed to FAMILY CHRISTIAN STORES, INC., 5300
Patterson Avenue, SE, Grand Rapids, Michigan 49530, Attention: Corporate
Secretary (or to any other individual or address that the Corporation
designates in writing to Indemnitee). Notice shall be deemed received
three (3) days after the date postmarked if sent by prepaid mail properly
addressed. In addition, Indemnitee shall give the Corporation any
information and cooperation that it may reasonably require and is within
Indemnitee's power to give.
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SECTION 14. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original, and all
of which taken together shall constitute a single document.
SECTION 15. CONTINUATION OF INDEMNIFICATION. The indemnification
rights provided to Indemnitee under this Agreement shall continue after
Indemnitee has ceased to be a director, officer, employee, agent or
fiduciary of the Corporation or any other corporation, partnership, joint
venture, trust or other enterprise that Indemnitee served in any of those
capacities at the request of the Corporation.
SECTION 16. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the Corporation and Indemnitee 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 the Corporation, spouses,
heirs, and personal and legal representatives.
SECTION 17. APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the state of Michigan
applicable to contracts made and to be performed in Michigan without giving
effects to the principles of conflicts of laws.
SECTION 18. LIABILITY INSURANCE. To the extent the Corporation
maintains an insurance policy or policies providing directors' and
officers' liability insurance, Indemnitee shall be covered by the policy or
policies, in accordance with its or their terms, to the maximum extent of
the coverage available for any director, officer, employee, agent or
fiduciary of the Corporation.
SECTION 19. AMENDMENTS; WAIVER. No supplement, modification,
amendment or waiver of this Agreement or any of its terms shall be binding
unless executed in writing by all of the parties to this Agreement or, in
the case of waiver, by the party against whom the waiver is asserted. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions of this Agreement (whether or
not similar) nor shall any waiver constitute a continuing waiver.
The parties have executed this Agreement as of the date stated in the
first paragraph of this Agreement.
FAMILY CHRISTIAN STORES, INC.
By__________________________________________
Its_________________________________________
INDEMNITEE
____________________________________________
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