SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 18, 1995
THE SHERWOOD GROUP, INC.
(Exact name of Registrant as specified in its Charter)
<TABLE>
<CAPTION>
DELAWARE 1-9480 22-2394480
<S> <C> <C>
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
</TABLE>
ONE EXCHANGE PLAZA, NEW YORK, NEW YORK 10006
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (212) 482-4000
NOT APPLICABLE
(Former name and former address, as changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
The Sherwood Group, Inc. (the "Company"), from time to time, intends
to enter into an indemnification agreement (the "Indemnification
Agreement") with executive officers and directors of the Company. A form
of the Indemnification Agreement is attached hereto as Exhibit No. 99.1.
<TABLE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
Exhibit 99.1 Form of Indemnification Agreement
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
THE SHERWOOD GROUP, INC.
(Registrant)
Dated: September 18, 1995 By:
Name: Dennis Marino
Title: Secretary
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT NUMBER. DESCRIPTION PAGE NO.
<S> <C>
Exhibit 99.1 Form of Indemnification Agreement 5
</TABLE>
EXHIBIT 99.1
INDEMNIFICATION AGREEMENT
AGREEMENT made as of this ____ day of ____________, 1995 by and
between The Sherwood Group, Inc., a corporation organized under the laws
of the State of Delaware (the "Company"), and executive named on the
signatory page hereto (the "Executive").
W I T N E S S E T H
A. Highly competent persons are becoming more reluctant to serve
publicly held corporations as directors or as executive officers 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.
B. The current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the
difficulty of attracting and retaining such persons.
C. The Board of Directors of the Company (the "Board") has
determined that the difficulty in attracting and retaining such persons is
detrimental to the best interests of the Company's stockholders and that
the Company should act to assure such persons that there will be increased
certainty of such protection in the future.
D. It is reasonable, prudent, and necessary for the Company
contractually to obligate itself to indemnify 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.
E. The Executive is willing to serve or continue to serve as a
director or executive officer of the Company on the condition that the
Executive be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and the Executive do hereby covenant and
agree a follows:
1. DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings.
(a) "Disinterested Director" means a director of the Company who
is not and was not a party to the Indemnified Proceeding in respect of
which Indemnification is sought by the Executive.
<PAGE>
(b) "Expenses" shall refer to all disbursements, costs and
expenses reasonably incurred by the Executive directly or indirectly in
connection with any Indemnified Event, including but not limited to, fees
and disbursements of counsel, accountants or other experts employed by the
Executive in connection with any Indemnified Event, including all such
expenses, disbursements and costs of investigation in connection with or
prior to the initiation of any proceeding relating to an Indemnified
Event.
(c) "Final Disposition", when referring to a judicial or
administrative proceeding or arbitration, shall refer to any judgment,
order or award rendered therein after the expiration of all rights of
appeal.
(d) "Indemnified Event" shall mean any claim asserted against
the Executive, whether civil or criminal for monetary or other relief; or
any action, suit, proceeding, investigation, whether civil or criminal, to
which the Executive is named as a party or is a subject of or witness in,
whether civil or criminal, or which he is threatened to be named as a
party, subject or witness, brought against the Executive by reason of his
serving or acting in any Indemnified Position or arising or allegedly
arising directly or indirectly out of any action, omission, occurrence or
event involving the Executive in any Indemnified Position, notwithstanding
whether any such service, action, omission, occurrence or event involving
the Executive in any Indemnified Position occurred prior to the date
hereof, including any proceeding, investigation, inquiry, formal or
informal or otherwise, conducted or brought by the Securities Exchange
Commission or other governmental agency, or The National Association of
Securities Dealers, Inc., a national stock exchange or similar
organization.
(e) "Indemnified Position" shall refer to any position held by
the Executive, or pursuant to which the Executive acts, as an officer,
director, employee, partners, trustee, administrator or agent of the
Company or a Related Party.
(f) "Indemnification Amount" shall refer to the amount of
judgment, order, or award, fines and costs, including interest thereon,
which the Executive is liable to pay or has paid in connection with an
Indemnified Event and amounts proposed to be paid in settlement by the
Executive in connection with any Indemnified Event.
(g) "Indemnify" or "Indemnification" shall refer to the
obligation of the Company herein to pay Expenses or Indemnification
Amounts.
(h) "Independent Counsel" means a law firm, or a member of a
law firm, experienced in matters of corporation law and which, during the
two years preceding the time designated as such, has not been retained to
represent: (1) the Company or the Executive in any matter material to
either party, or (ii) any other party to an Indemnified Proceeding.
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 or the Executive in an action to determine the
Executive's rights under this Agreement.
<PAGE>
(i) "Related Party" shall refer to (i) any other corporation in
which the Company has an equity interest in excess of fifty percent and
(ii) any other corporation or any partnership, joint venture, trust,
employee benefit plan or any other enterprise or association in which the
Executive has served in any Indemnified Position (as hereinabove defined),
at the request of the Company or for the convenience of the Company or to
represent the Company's interest. Any entity or plan described in Section
1(a)(ii) in which the Company has any interest or which is established in
whole or in part for the benefit of the Company or any other Related Party
or the Company or Related Party's employees shall be presumed to be a
Related Party.
2. SERVICES TO THE COMPANY. The Executive will serve, and/or
continue to serve, as a director or in any other Indemnified Position, at
the will of the Company (or under separate contract, if any), faithfully
and to the best of his ability; provided that the Executive may at any
time and for any reason resign from such Indemnified Position (subject to
any contractual obligations which the Executive shall have assumed apart
from this Agreement) but the obligations provided for herein shall
continue after such resignation or termination.
3. INDEMNITY.
(a) The Company hereby agrees to indemnify the Executive and
hold the Executive harmless to the full extent permitted by the provisions
of the Delaware General Corporation Law, or by any amendment thereof or
other statutory provision authorizing or permitting such Indemnification
which may be adopted after the date hereof and such Indemnification shall
be made unless expressly prohibited by Delaware law. Without limiting the
generality of the foregoing, the Company agrees to indemnify the Executive
and hold the Executive harmless from and against, and pay any and all,
Expenses and Indemnification Amounts.
(b) Notwithstanding anything to the contrary contained in this
Agreement, in connection with any Indemnified Event, the Company, except
as hereinafter provided, shall have the right to choose counsel who shall
represent the Executive in such proceeding, provided that such counsel has
no conflict of interest in connection with such representation in light of
then applicable standard of professional conduct. If, however, such
Indemnified Event is criminal in nature or such suit or proceeding is in
the nature of an administrative or regulatory action or proceeding
(hereinafter "Non-Civil Event") and the Executive objects to the Company's
choice of counsel, such counsel shall be chosen by a committee of five
members of the Company's Board of Directors chosen by the Executive (or,
if at such time the Company's Board of Directors does not consist of at
least five Disinterested Directors, by Independent Counsel). In addition,
with respect to any Indemnified Event other than a Non-Civil Event, the
Executive shall offer to settle such Indemnified Event or shall accept an
offer of settlement with respect thereto, in such amount and on such other
or additional terms and conditions, as the Company may specify by notice
to the Executive, provided however that (i) the Executive shall not be
obligated hereby to offer to settle any Indemnified Event or to accept an
offer of settlement with respect thereto and (ii) the Company shall not
settle any Indemnified Event without the Executive's written consent, if
the terms and conditions of such settlement may be reasonably deemed to
defame the Executive's professional reputation. Further, if the Executive
receives any knowledge of any Indemnified Event, then the Executive shall
promptly notify the Company of such Indemnified Event.
(c) Notwithstanding anything to the contrary in Section 3(b)
hereof regarding the selection of counsel to represent the Executive in
connection with an Indemnified Event under this Agreement, the Company and
the Executive hereby agree that such counsel shall be selected by the
Executive subject to the reasonable satisfaction of the Company. However,
in no event shall counsel be selected to represent the Executive in any
Non-Civil Event unless the Executive approves such selection.
4. ADVANCEMENT OF EXPENSES. The Company shall advance all Expenses
reasonably incurred by or on behalf of the Executive in connection with
any Indemnified Event within twenty (20) days after the receipt by the
Company of a statement or statements from the Executive requesting such
advance payment or payments from time to time. Such statement or
statements shall identify the nature and amount of the Expenses to be
advanced with reasonable specificity. The Executive agreed to pay any
Expenses advanced if it shall ultimately be determined upon Final
Disposition of the proceeding related to an Indemnified Event, as herein
after provided, that the Executive was not entitled to payment of Expenses
in connection with the Indemnified Event for which such Expenses were
paid.
5. INDEMNIFICATION ABSOLUTE. If any determination is required with
respect to the Executive's right to Indemnification, such determination
shall be made in accordance with paragraph 6 hereof subject to the
Executive's right to judicial or arbitrator's review pursuant to Section 9
and provided further the Executive shall not be entitled to
Indemnification if a court of competent jurisdiction, considering a
proceeding relating to an Indemnified Event, determines pursuant to a
Final Disposition, that the Executive was not entitled to Indemnification.
Notwithstanding the foregoing, any determination that the Executive was
not entitled to payment of Expenses shall only be made after the Final
Disposition of any Proceeding relating to an Indemnified Event for which
the Expenses were advanced. In no event shall the Executive have an
obligation to repay Expenses with respect to an Indemnified Event referred
to in Section 7(d).
6. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) If the Company believes in good faith that a determination
of the Executive's entitlement to Indemnification (including any
determination respecting any alleged obligation of the Executive to repay
Expenses advanced) is necessary or appropriate, then notice thereof shall
promptly be given to the Executive. In no event shall such notice be
given later than ten (10) days after any request of Executive for payment
of an Indemnification Amount. The Executive may thereafter elect, by
notice to the Company given within ten (10) business days after the
Company's notice, to have such determination made either by (i) a majority
of a quorum of Disinterested Directors or (ii) by an Independent Counsel
pursuant to the provisions of paragraph 6(b) hereof. If the Executive
fails to make any election provided for therein, the determination shall
be made by Disinterested Directors. If, for any reason a determination is
to
<PAGE>
be made by Disinterested Directors, such determination shall be made
within thirty (30) days of the Executive notice. If a majority of the
Board does not consist of Disinterested Directors, such determination
shall be made in accordance with Section 6(b) by Independent Counsel.
(b) The Independent Counsel making a determination under Section
6(a) (or pursuant to Section 3(b)) shall be selected by the Executive in
his notice provided for in Section 6(a). The Company may, within seven
days after such written notice of selection shall have been given, deliver
to the Executive a written objection to such selection. Such objection
may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" and the
objection shall set forth with particularity the factual basis of such
assertion. Such written objection shall be made within seven (7) days of
the Executive's notice of selection and shall contain the name of the
Independent Counsel selected by the Company. Such Independent Counsel,
together with the Executive's Independent Counsel shall select within
seven days of the Company's selection, a third Independent Counsel which
shall make the determination hereunder. If no Independent Counsel is
selected within seven days of the Executive's request then the entitlement
of the Executive to Indemnification shall be determined by arbitration as
hereinafter provided. The Company shall pay any and all reasonable fees
and expenses of Independent Counsel incurred by such Independent Counsel
in connection with any determination pursuant to Section 6(b), 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) If it is so determined that the Executive is entitled to
Indemnification, payment to the Executive shall be made within five (5)
days after such determination.
(d) The Executive shall cooperate with the persons making such
determination with respect to the Executive's entitlement to
indemnification, including providing to such persons upon reasonable
advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available
to the Executive and reasonably necessary to such determination. Any
costs or expenses (including attorneys fees and disbursements) incurred by
the Executive in so cooperating shall be borne by the Company
(irrespective of the determination as to the Executive's entitlement to
Indemnification) and the Company hereby indemnifies and agrees to hold the
Executive harmless therefrom.
7. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In all cases in which a determination is to be made, the
Executive shall be presumed entitled to Indemnification hereunder unless
the Executive is clearly determined not to be entitled to such
Indemnification by clear and convincing proof that such payment shall be
unlawful.
(b) If the person, persons, or entity empowered or selected
under Section 6 of this Agreement to determine whether the Executive is
entitled to the Indemnification Amount shall not have made such
determination within forty-five (45) days after receipt by the Company of
the Executive request therefor, the requisite determination of entitlement
to such payment shall be deemed to have been made and the Executive shall
be entitled to such Indemnification.
(c) The termination of any proceeding relating to an Indemnified
Event 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 the Executive to
Indemnification or create a presumption that the Executive 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, with respect to any
criminal proceeding, that the Executive had reasonable cause to believe
that his conduct was unlawful.
(d) Notwithstanding any other provision of this Agreement, the
Executive shall in no event be required to repay any Expense payments
advanced to the Executive and no determination shall be made pursuant to
Section 6 to the extent the Executive (i) has prepared to serve or has
served as a witness in any proceeding related to an Indemnified Event, or
(ii) has been successful on the merits or otherwise in defense of any
claim, issue or matter involved in any Indemnified Event therein, whether
as a result of the initial adjudication or on appeal or the abandonment
thereof by a party.
8. NON-EXCLUSIVITY; DURATION OF AGREEMENT; INSURANCE; 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 the Executive may at any time be entitled under
applicable law, the Certificate of Incorporation, the By-laws, any other
agreement, a vote of stockholders or a resolution of directors, or
otherwise.
(b) This Agreement shall continue until and terminate upon the
later of: (i) ten (10) years after the date that the Executive shall have
ceased to serve in an Indemnified Position; or (ii) the final termination
of any Indemnified Event.
(c) This Agreement shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Executive and
his or her heirs, executors, and administrators.
(d) To the extent that the Company maintains an insurance policy
or policies providing liability insurance for directors or executive
officers of the Company or fiduciaries of any other corporation,
partnership, joint venture, trust, employee benefit plan, or other
enterprise which such person serves at the request of the Company, the
Executive shall be covered by such policy or policies in accordance with
its or their terms to the maximum extent of the coverage available for any
such director or executive officer under such policy or policies.
9. PROCEEDINGS.
<PAGE>
(a) The parties hereto agree that except as otherwise provided
for herein, any disputes arising with respect to the interpretation or
enforcement of any provision hereof shall be submitted to arbitration in
the City of New York, in accordance with the then existing rules of the
American Arbitration Association ("AAA"). In any arbitration pursuant to
this Agreement, the award or decision shall be rendered by a majority of
the members of an arbitration panel consisting of three members chosen in
accordance with the then existing rules of the AAA. The award or decision
of the arbitration panel pursuant to this Section 9 shall be binding and
conclusive on the parties, provided that enforcement of such award or
decision may be obtained in any court having jurisdiction over the party
against whom such enforcement is sought. The Company hereby agrees to be
bound by the determination of such arbitrator and shall bear all fees,
costs and expenses imposed by the AAA on account thereof, irrespective of
the determination thereof. The provision of Section 9(c) shall govern
with respect to the proceedings referred to therein.
(b) In the event that, pursuant to Section 6, a determination is
made that the Executive shall not be entitled to payment of
Indemnification Amount or that payment of Expenses must be repaid or if
the Company fails to pay any Indemnification demanded, the Executive shall
nevertheless be entitled, at his option, to a final judicial determination
or may seek arbitration of his entitlement to indemnification hereunder in
respect of such claim. In the event the Executive seeks a judicial
determination, the Executive shall commence an action in a court of the
State of Delaware, New York or New Jersey. In the event the Executive
seeks an award in arbitration, (i) such arbitration shall be conducted in
New York City pursuant to Section 9(a), and (ii) the arbitrator shall
notify the parties of his or her decision within sixty (60) days following
the initiation of such arbitration (or such other period proscribed by the
rules of AAA). The Company further agrees that its execution of this
Agreement shall constitute a stipulation by which it shall be bound in any
court or arbitration in which such proceeding shall have been commenced,
continued or appealed that (i) it shall not oppose the Executive's right
to seek any such adjudication or award in arbitration or any other claim
by reason of any prior determination made pursuant to this Agreement with
respect to the Executive's right to Indemnification under this Agreement
on such claim or any other claim, or, except in good faith, raise any
objections not specifically relating to the merits of the Executive's
claim; and (ii) for purposes of this Agreement any such adjudication or
arbitration shall be conducted DE NOVO and without prejudice by reason of
any prior determination that the Executive is not entitled to
Indemnification.
(c) Whether or not the court or arbitrators shall determine that
the Executive is entitled to payment of Indemnification Amount or has to
return the payment of Expenses or otherwise finds against the Executive,
the Company shall within thirty (30) days after written request therefor
(and submission of reasonable evidence of the nature and amount thereof),
and unless there is a specific judicial finding that the Executive's suit
or arbitration was frivolous, pay all costs and expenses (including
attorneys' fees and disbursements) incurred by the Executive in connection
with such adjudication or arbitration (including, but not limited to, any
appellate proceedings).
<PAGE>
l0. 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 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 (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section 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 by the
provision held invalid, illegal, or unenforceable. The parties agree that
to the fullest extent possible the provisions of this Agreement shall be
construed so as to give effect to the parties' intention that the
Executive be indemnified and held harmless hereunder against any and all
Expenses and Indemnification Amounts.
11. MERGER OR CONSOLIDATION OF THE COMPANY. In the event that the
Company shall be a constituent corporation in a consolidation or merger,
whether or not the Company is the resulting or surviving corporation, the
Executive shall stand in the same position under this Agreement with
respect to the Company as if its separate existence had continued.
12. ENFORCEMENT.
(a) The Company stipulates and agrees that its execution of this
Agreement shall also constitute a stipulation by which it shall be bound
in any court or arbitration in which a proceeding by the Executive for
enforcement of his rights shall have been commenced, continued or
appealed, that its obligations set forth herein are unique and special,
and that failure of the Company to comply with the provisions of this
Agreement will cause irreparable injury to the Executive, for which a
remedy at law will be inadequate. As a result, in addition to any other
right or remedy he may have at law or in equity with respect to a
violation of this Agreement, the Executive shall be entitled to specific
performance by the Company of its obligations under this Agreement. The
Company further stipulates and agrees that (i) it shall not, except in
good faith, raise any objection not specifically relating to the merits of
the Executive's claim or (ii) if a determination was made or deemed to
have been made pursuant to the terms of Section 6 hereof that the
Executive is entitled to payment of Indemnification Amount or Expenses, it
shall be bound by such determination.
(b) In the event that the Executive is subject to or intervenes
in any legal action in which the validity or enforceability of this
Agreement is at issue or institutes any legal action, for specific
performance or otherwise, to enforce his rights hereunder, or to recover
damages for breach of this Agreement, the Executive shall, within thirty
(30) days after written request to the Company therefor (and submission of
reasonable evidence of the amount thereof), and unless there is a specific
judicial finding that the Executive's suit was frivolous, be indemnified
by the Company against all costs and expenses (including attorney's fees
and disbursements) incurred by him in connection therewith.
<PAGE>
13. NOTIFICATION AND DEFENSE OF CLAIM. The Executive agrees to
promptly notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any proceeding involving an Indemnification Event provided,
however, that the failure of the Executive to give such notice to the
Company shall not adversely affect the Executive's right under this
Agreement except to the extent the Company shall have been materially
prejudiced by such failure. Nothing in this Agreement shall constitute a
waiver of the Company's right to seek participation, at its own expense,
in any proceeding which may give rise to indemnification hereunder.
14. 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.
15. MODIFICATION AND WAIVER. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute
a continuing waiver.
16. NOTICES. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have
been duly given if (i) delivered by hand and receipted for by the party to
whom said notice or other communication shall have been directed, or (ii)
mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
(a) If to the Executive, to:
(b) If to the Company, to:
The Sherwood Group, Inc.
One Exchange Plaza
New York, New York 10006
Attn: Arthur Kontos
President and Chief Executive Officer
or to such other address as may have been furnished to the Executive by
the Company or to the Company by the Executive, as the case may be.
17. ENTIRE AGREEMENT. All prior and contemporaneous agreements and
understandings between the parties with respect to the subject matter of
this Agreement are superseded by this Agreement, and this Agreement
constitutes the entire understanding between the parties. This Agreement
may not be modified, amended, changed or discharged except by a writing
signed by the parties hereto, and then only to the extent therein set
forth.
18. NONASSIGNMENT. This Agreement may not be assigned by either of
the parties hereto.
19. GOVERNING LAW. The parties agree that this Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first above written.
THE SHERWOOD GROUP, INC.
By:
EXECUTIVE
