EXHIBIT 10(r)
Form of Indemnification Agreement Between the
Company and Each of Its Officers and Directors
MATERIAL SCIENCES CORPORATION
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of this ____ day of ______________, 199_,
by and between Material Sciences Corporation, a Delaware corporation (the
"Corporation"), and _______________________ (the "Indemnitee").
WHEREAS, Indemnitee currently serves as a director or an officer of
the Corporation, or both, or as a director of another enterprise at the request
of the Corporation, and, as such, may be subjected to claims, suits or
proceedings arising as a result of such service;
WHEREAS, as an inducement to Indemnitee to continue to serve as such
director or officer, the Corporation has agreed to indemnify Indemnitee against
expenses and costs incurred by Indemnitee in connection with any such claims,
suits or proceedings, in accordance with, and to the fullest extent authorized
by, the General Corporation Law of the State of Delaware as it may be in effect
from time to time (the "Delaware Law");
WHEREAS, the parties desire to set forth the terms and conditions of
such indemnification.
NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
Section 1. Agreement to Indemnify. The Corporation hereby agrees to
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indemnify, keep indemnified and hold harmless, Indemnitee (which shall include
any legal representatives of such person) to the fullest extent authorized by
the Delaware Law, including, without limitation, Section 145(f) thereof, and
other applicable law as in effect from time to time, from and against any
expenses (including expenses of investigation and preparation and reasonable
fees and disbursements of counsel, accountants and other experts), judgments,
fines, liability, losses and amounts paid in settlement, actually and reasonably
incurred by Indemnitee in connection with any threatened, pending or completed
action, suit, claim or proceeding (hereinafter, a "proceeding"), whether civil,
criminal, administrative or investigative, by reason of the fact that Indemnitee
is or was a director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee, fiduciary or agent
of another corporation, partnership, joint venture, trust or other enterprise,
and whether or not the cause of such proceeding occurred before or after the
date of this Agreement. Notwithstanding the foregoing, but except as provided
in Section 8 hereof, the Corporation shall indemnify the Indemnitee in
connection with a proceeding (or part thereof) initiated by the Indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. For purposes of this Agreement, the terms "corporation,"
"other enterprise," "fines" and "serving at the request of the Corporation"
shall have the meanings provided in Section 145 of the Delaware Law.
Section 2. Procedure for Indemnification. Any indemnification under
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Section 1 of this Agreement or advance of expenses under Section 5 of this
Agreement shall be made promptly, and in any event within 30 days, upon the
written request of the Indemnitee. If a determination by the Corporation that
the Indemnitee is entitled to indemnification pursuant to this Agreement is
required, and the Corporation fails to respond within 60 days to a written
request for indemnity, the Corporation shall be deemed to have approved the
request. If the Corporation denies a written request for indemnification or
advancement of expenses, in whole or in part, or if payment in full pursuant to
such request is not made within 30 days after response (or deemed response) by
the Corporation, the right to indemnification or advances as granted by this
Agreement shall be enforceable by the Indemnitee in any court of competent
jurisdiction. The Indemnitee's costs and expenses incurred in connection with
successfully establishing his or her right to indemnification, in whole or in
part, in any such action shall also be indemnified by the Corporation, in
accordance with Section 8 of this Agreement. It shall be a defense by the
Corporation to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under applicable law for the Corporation to indemnify the
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Corporation and the Indemnitee shall be presumed to have acted in
accordance with such standard unless it shall be determined that the Indemnitee
has not met such standard. Neither the failure of the Corporation to have made a
determination prior to the commencement of any such action that indemnification
of the Indemnitee is proper because the applicable standard of conduct has been
met, nor an actual determination by the Corporation, shall be a defense to such
action or create a presumption that the Indemnitee has not met the applicable
standard of conduct. Determinations required to be made pursuant to this
Agreement shall be made by any of the following, the final identification of
which shall be at the sole discretion of Indemnitee, to be made after request by
the Corporation: (i) the Board of Directors of the Corporation, by a majority
vote of a quorum consisting of directors who are not parties to the proceeding,
(ii) independent legal counsel in a written opinion, which counsel shall be
acceptable to the Indemnitee and such quorum of the Board of Directors, or which
at the option, of the Indemnitee shall be selected by the Chief Judge of the
U.S. District Court for the Northern District of Illinois, (iii) the
stockholders of the Corporation, or (iv) a court of competent jurisdiction.
Section 3. Notice to Corporation. Indemnitee shall notify the
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Corporation in writing of any matter with respect to which Indemnitee intends to
seek indemnification hereunder as soon as reasonably practicable following the
receipt by Indemnitee of written notice thereof, provided that delay in
notifying the Corporation shall not constitute a waiver by Indemnitee of his
rights hereunder.
Section 4. Indemnitee to Control Defense. Indemnitee shall control
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the defense (including the selection of qualified counsel) of any proceeding
against him which may give rise to a right of indemnification hereunder,
provided, however that (a) if the insurance carrier which shall have
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supplied any D&O Coverage (as defined in Section 6 hereof) shall be willing to
conduct such defense without any reservation as to coverage, then unless on
written application by Indemnitee
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concurred in by the Board of Directors of the Corporation, Indemnitee and the
Board of Directors deem it undesirable, such insurance carrier shall select
counsel to conduct such defense; and (b) in any case involving two or more
defendants who are entitled to indemnification by the Corporation, separate
counsel may be used by Indemnitee only to the extent necessary to avoid
conflicts of interest.
Section 5. Expenses. In the event of any proceeding against
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Indemnitee which may give rise to a right of indemnification pursuant to this
Agreement, following written request to the Corporation by Indemnitee, the
Corporation shall advance to Indemnitee amounts equal to reasonable expenses
incurred by Indemnitee in defending such proceeding in advance of the final
disposition thereof upon receipt of (i) a satisfactory undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
by final judgment of a court of competent jurisdiction that he or she is not
entitled to be indemnified by the Corporation hereunder, and (ii) satisfactory
documentation as to the amount of such expenses. Indemnitee's written
certification together with a copy of the statement paid or to be paid by
Indemnitee shall constitute satisfactory documentation for purposes of
subparagraph (ii) hereof absent manifest error.
Section 6. Insurance. The Corporation shall use all reasonable
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efforts to provide Indemnitee with Directors and Officers insurance coverage
("D&O Coverage") providing to Indemnitee coverage no less advantageous than that
currently in effect for directors and officers of the Corporation generally. In
the event such coverage is not available to the Corporation at reasonable cost,
the Corporation shall so notify the Board of Directors as promptly as reasonably
practicable and shall obtain the best coverage then available in the insurance
industry for such cost. The Indemnitee shall not settle any matter for which he
has sought or intends to seek indemnification hereunder without first attempting
to obtain any approval required with respect to such settlement by the insurance
carrier of any applicable D&O Coverage. If the Indemnitee seeks such approval
but such approval is not granted by such insurance carrier, the Indemnitee shall
be entitled to indemnification from the Corporation to the fullest extent
provided by such D&O Coverage or to the fullest extent otherwise provided by
this Agreement, whichever shall be greater. The provision of D&O Coverage by an
insurance carrier at the expense of the Corporation or the failure to so provide
D&O Coverage shall in no way limit or diminish the obligation of the Corporation
to indemnify Indemnitee as provided elsewhere in this Agreement, which
obligation shall be absolute, provided that any amounts actually recovered by
Indemnitee from the insurance carrier providing D&O Coverage shall be applied in
reduction of amounts otherwise owing by the Corporation by reason of its
indemnification under this Agreement.
Section 7. Settlement. Neither the Corporation nor Indemnitee shall
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settle or compromise any proceeding covered by this Agreement without first
obtaining written consent to such settlement or compromise from the other, which
consent in no event shall be unreasonably withheld.
Section 8. Collection Costs. In the event Indemnitee is required to
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bring any action to enforce rights or to collect amounts due under this
Agreement and is successful in such
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action, the Corporation shall reimburse Indemnitee for all of Indemnitee's
reasonable fees and expenses in bringing and pursuing such action.
Section 9. Nature of Rights. All agreements and obligations of the
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Corporation contained herein shall continue during the period Indemnitee is a
director or officer of the Corporation or is or was serving at the request of
the Corporation as a director of another corporation, partnership, joint
venture, trust or other enterprise and shall continue thereafter so long as
Indemnitee shall be subject to any possible claim or threatened, pending or
completed proceeding, whether civil, criminal, administrative or investigative,
by reason of the fact that Indemnitee was a director or officer of the
Corporation or serving in any other capacity referred to herein. The
indemnification rights and the rights to payment of expenses granted to
Indemnitee under this Agreement shall not be deemed exclusive of, or in.
limitation of, any rights to which Indemnitee may be or hereafter become
entitled under any statute or agreement, the Corporation's Certificate of
Incorporation or Bylaws, a vote of stockholders or disinterested directors, or
otherwise. The amounts to which Indemnitee is entitled under this Agreement in
connection with a proceeding shall be reduced by the amount of any other
indemnification or reimbursement of such liability and expense to such person in
connection with the same proceeding.
Section 10. Successors and Assigns. The rights granted to Indemnitee
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hereunder shall inure to the benefit of Indemnitee, his personal representative,
heirs, executors, administrators and beneficiaries, and this Agreement shall be
binding upon the Corporation, its successors and assigns.
Section 11. Miscellaneous. This Agreement and the rights and
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obligations of the parties hereunder shall be governed by the internal laws, and
not the laws of conflict, of the State of Delaware. To the extent permitted by
applicable law, the parties hereby waive any provision of law which renders any
provision in this Agreement unenforceable in any respect. Whenever possible,
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision shall be held to
be prohibited by or invalid under applicable law, such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and all other provisions shall remain in
full force and effect. The captions used in this Agreement are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit, characterize or affect in any way any of the provisions of this
Agreement, and all of the provisions of this Agreement shall be enforced and
construed as if no captions had been used in this Agreement. This Agreement may
be executed in two or more counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the date first above written.
MATERIAL SCIENCES CORPORATION
By:_______________________________
Its:______________________________
__________________________________
Indemnitee
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