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EXHIBIT 10(u)
An Indemnification Agreement in the following form has been executed by the
Company and each of Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxx, Xxxxxx
X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxxx X. Xxxxxxx and Xxx Xxxxx:
AUTOCAM CORPORATION
INDEMNIFICATION AGREEMENT
This Agreement is made as of August 13, 1999, by and between Autocam
Corporation (the "Corporation') a Michigan corporation, and [Individual
Director's Name] ("Indemnitee").
Indemnitee is a director of the Corporation. It is essential to the
Corporation to attract and retain as directors the most capable persons
available. The Corporation's Articles of Incorporation, as approved by its
shareholders, provide that the Corporation's directors shall be indemnified as
of right to the fullest extent permitted by law. This Agreement implements that
provision. In consideration of Indemnitee's agreement to serve as a director of
the Corporation, the parties are entering into this Agreement.
THEREFORE, the Corporation and Indemnitee agree:
Section 1. Definitions. As used in this Agreement:
(a) "Expenses" shall mean all reasonable costs, expenses, and
obligations actually 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, without limitation, any attorney, accountant and expert fees
and court costs.
(b) "Proceeding" shall mean 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,
including without limitation any administrative or civil action
instituted by any federal or state securities regulatory agency, in
which Indemnitee is, 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, or agent 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, or agent of the Corporation or
by reason of the fact that Indemnitee is or was elected, appointed or
serving at the request of the Corporation as a director, officer,
partner, trustee, employee, agent or fiduciary of any other foreign or
domestic corporation, partnership, joint venture, trust or other
enterprise, whether for profit or not.
(c) "Resolution Costs" shall include any amount paid in
connection with a Proceeding and in satisfaction of a judgment, fine or
penalty, or any amount paid in settlement of a Proceeding.
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(d) "Change in Control" shall mean an occurrence of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A issued under the Securities Exchange Act
of 1934, as amended (the "Act"). Without limiting the inclusiveness of
the definition in the preceding sentence, a Change in Control of the
Corporation shall be deemed to have occurred as of the first day that
any one or more of the following conditions is satisfied: (a) any
Person is or becomes the "beneficial owner' (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of
the Corporation's then outstanding securities; (b) the failure at any
time of the Continuing Directors to constitute at least a majority of
the board of directors of the Corporation; or (c) any of the following
occur: (i) any merger or consolidation of the Corporation, other than a
merger or consolidation in which the voting securities of the
Corporation immediately prior to the merger or consolidation continue
to represent (either by remaining outstanding or being converted into
securities of the surviving entity) 60% or more of the combined voting
power of the Corporation or surviving entity immediately after the
merger or consolidation with another entity; (ii) any sale, exchange,
lease, mortgage, pledge, transfer or other disposition (in a single
transaction or a series of related transactions) of assets or earning
power aggregating more than 50% of the assets or earning power of the
Corporation on a consolidated basis; (iii) any complete liquidation or
dissolution of the Corporation; (iv) any reorganization, reverse stock
split or recapitalization of the Corporation which would result in a
Change in Control as otherwise defined herein; or (v) any transaction
or series of related transactions having, directly or indirectly, the
same effect as any of the foregoing.
(e) "Continuing Directors" means the individuals who were
either (a) serving as directors of the Corporation on June 1, 1999, or
(b) subsequently appointed or elected as a director, if appointed or
nominated by at least a majority of the Continuing Directors in office
at the time of the nomination or appointment, but specifically
excluding any individual whose initial assumption of office occurs as a
result of either an actual or threatened "election contest" (as the
term is used in Rule 14a-11 of Regulation 14A promulgated under the
Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Corporation's board of
directors.
(f) "Person" has the same meaning as set forth in Sections
13(d) and 14(d)(2) of the Act.
(g) A "Potential Change in Control" shall be deemed to have
occurred if (i) the Corporation enters into an agreement, the
consummation of that would result in the occurrence of a Change in
Control; (ii) any person (including the Corporation) publicly announces
an intention to take or to consider taking actions that once
consummated would constitute a Change in Control; or (iii) the Board of
Directors adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
Section 2. Agreement To Serve. Indemnitee agrees to serve as a director
and/or officer of the Corporation for so long as Indemnitee is duly electedor
appointed or until the tender of Indemnitee's written resignation.
Section 3. Indemnification.
(a) The Corporation shall indemnify Indemnitee against all
Expenses incurred by Indemnitee in connection with any Proceeding,
except as otherwise provided in this Agreement. The Corporation shall
indemnify Indemnitee against all Resolution Costs incurred by
Indemnitee in connection with any Proceeding other than a Proceeding by
or in the right of the Corporation, except as otherwise provided in
this Agreement. However, no indemnification shall be made under this
Section if and to the extent that such Expenses or Resolution Costs
are:
(i) with respect to remuneration paid Indemnitee if it
shall be determined by a final judgment or other final
adjudication that such remuneration was in violation of law;
(ii) on account of any suit in which judgment is
rendered against Indemnitee for an accounting of profits made
from the purchase and sale by Indemnitee of securities of the
Corporation pursuant to the provisions of Section 16 of the
Securities Exchange Act of 1934 and amendments thereto;
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(iii) on account of Indemnitee's conduct which is
determined by a final judgment or other final adjudication to
have been knowingly fraudulent, deliberately dishonest, or
willful misconduct;
(iv) on account of Indemnitee's conduct which is finally,
affirmatively and unconditionally determined to have not been
in good faith, to have not been believed by Indemnitee to have
been in or not opposed to the best interests of the
Corporation, or to have produced an unlawful personal benefit;
(v) with respect to a criminal proceeding if the
Indemnitee knew or reasonably should have known that
Indemnitee's conduct was unlawful; or
(vi) if a final decision by a court having jurisdiction in
the matter shall determine that such indemnification is not
lawful.
(b) In addition to any indemnification provided under
Subsection 3(a) above, the Corporation shall indemnify Indemnitee
against any Expenses or Resolution Costs incurred by Indemnitee,
regardless of the nature of the Proceeding that Expenses and/or
Resolution Costs were incurred, if the Expenses or Resolution Costs
would have been covered, insured or reimbursed under any insurance
policy in effect on the effective date of this Agreement or that become
effective on any later date.
(c) It is the intent of this Agreement that, in addition to
any indemnification provided under Subsections 3(a) and 3(b), the
Corporation shall indemnify Indemnitee, to the fullest extent allowed
by law as presently or hereafter enacted or interpreted, against any
Expenses and Resolution Costs incurred by Indemnitee in connection with
any Proceeding. To the extent a change in, or in the implementation or
interpretation of, the Michigan Business Corporation Act or the federal
or state securities laws (whether by statute, regulation, judicial
decision or otherwise) permits greater indemnification, either by
agreement or otherwise, than presently provided by law or 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.
(d) Without limiting Indemnitee's right to indemnification
under any other provision of this Agreement, the Corporation shall
indemnify Indemnitee in accordance with the provisions of this
Agreement if Indemnitee is a party to or threatened to be made a party
to or otherwise involved in any Proceeding by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact
that Indemnitee was or is a director, officer, employee, or agent of
the Corporation or is or was serving at the request of the Corporation
as a director, officer, partner, trustee, employee, agent, or fiduciary
of another foreign or domestic corporation, partnership, joint venture,
trust, or other enterprise, whether for profit or not, against all
Expenses and Resolution Costs incurred by Indemnitee, if it is
determined that Indemnitee acted in good faith in a manner which
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Corporation or its shareholders, except that no
indemnification shall be made under this Subsection in respect of any
claim, issue, or matter as to which Indemnitee shall have been adjudged
to be liable to the Corporation in the performance of his duty to the
Corporation unless, and only to the extent that, any court in which
such Proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all the relevant
circumstances, Indemnitee is fairly and reasonably entitled to
indemnity, in which event indemnification shall be limited to
reasonable expenses incurred.
(e) Notwithstanding anything in this Agreement to the
contrary, prior to a Change in Control, Indemnitee shall not be
entitled to indemnification pursuant to this Agreement 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 such Proceeding.
(f) Notwithstanding anything in this Agreement, no
indemnification shall be paid in violation of Michigan or federal laws
and regulations.
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Section 4. Payment Of Indemnification.
(a) The Corporation shall pay or reimburse Indemnitee all
Expenses and Resolution Costs for which Indemnitee is entitled to
indemnification under Section 3, upon written demand for such payment
or reimbursement from the Indemnitee, promptly if, when and to the
extent that a determination has been made, or deemed to have been made,
in the manner provided in this Section 4 that Indemnitee is entitled to
indemnification under Section 3.
(b) A determination as to whether or not Indemnitee is
entitled to indemnification shall be made, no later than 30 days after
receipt by the Corporation of a written demand of Indemnitee for such
payment or reimbursement, by: (i) a majority vote of a quorum of
directors who are not parties or threatened to be made parties to such
Proceeding; (ii) if a quorum cannot be obtained under subsection (i), a
majority vote of a committee of two or more directors, duly designated
by the board, who are not parties or threatened to be made parties to
such Proceeding; or (iii) if there are no directors who are not parties
to the Proceeding, independent legal counsel selected by the board. If
such determination is not referred to independent legal counsel, the
board of directors, or committee provided in this subsection, shall be
deemed to have made a determination that the Indemnitee is entitled to
Indemnification under Section 3 and that the Expenses and Resolution
Costs are reasonable, unless such board or committee determines, in
writing and in unconditional terms, that indemnification is not allowed
under Section 3 of this Agreement or that a specified portion of such
Expenses and Resolution Costs are not reasonable.
(c) If a Change in Control (as defined in Section 1 (d)) has
occurred, the determination made under Section 4 shall be made by
independent legal counsel and not the board of directors or a committee
of the board of directors. If there has been a Change in Control,
independent legal counsel shall be selected by Indemnitee. The
Corporation shall pay the reasonable fees of the independent legal
counsel and fully indemnify such counsel against any and all expense
(including attorney fees), claims, liabilities, and damages arising out
of or relating to this Agreement or its engagement pursuant thereto.
(d) If the indemnification demand is referred to independent
legal counsel under this Section 4, a determination as to whether or
not Indemnitee is entitled to indemnification shall be made no later
than 45 days after Indemnitee's initial demand to the Corporation.
Independent legal counsel shall be deemed to have made a determination
that indemnification is allowed under Section 3 of this Agreement and
that the Expenses and Resolution Costs are reasonable, unless within
that time independent legal counsel presents to the Corporation's board
of directors a written opinion stating in unconditional terms that
Indemnitee is not entitled to indemnification under Section 3 of this
Agreement or that a specified portion of such Expenses and Resolution
Costs are not reasonable.
(e) If the Corporation has not made a determination as to
whether or not indemnification is allowed under Section 3 within the 30
day period (or 45 day period if referred to independent legal counsel)
prescribed in Section 4, the Corporation, shall be deemed to have made
a determination that Indemnitee is entitled to indemnification under
Section 3 and that the Expenses and Resolution Costs are reasonable.
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(f) 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
required or 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, committee, or legal
counsel to have made a determination prior to the commencement of any
Proceeding that indemnification is proper, nor an actual determination
by the Corporation, including its board of directors, committee, or
independent 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. If the board of directors, committee, or independent
legal counsel determines in accordance with Section 4 above that
Indemnitee would not be permitted to be indemnified in whole or in
part, Indemnitee shall have the right to commence litigation in any
court in the State of Michigan having subject matter jurisdiction
thereof and in which venue is proper seeking an independent
determination by the court or challenging. any such determination by
the board of directors, committee, or independent legal counsel, and
the Corporation hereby consents to service of process and to appear in
any such proceeding. Expenses incurred by Indemnitee in connection with
successfully establishing Indemnitee's right to indemnification, in
whole or in part, shall also be paid or reimbursed by the Corporation.
(g) Indemnitee shall not participate in any way in the board
of directors' or committees' discussion and approval of indemnification
under this Section 4. However, Indemnitee may (i) participate in
designation of a committee or a selection of independent legal counsel
under Subsection 4(b) and (ii) present Indemnitee's request to the
board of directors and respond to any inquiries concerning Indemnitee's
involvement in the circumstances giving rise to the administrative
proceeding or civil action.
Section 5. Payment or Reimbursement of Indemnitee in Advance of Final
Disposition.
(a) The Corporation shall pay or reimburse Indemnitee all
Expenses incurred by Indemnitee in advance of final disposition of a
Proceeding, within 30 days after receipt by the Corporation of a
written request for such advance payment or reimbursement, if:
(i) Indemnitee has furnished the Corporation with a
written affirmation of his or her good faith belief that he or
she has met the applicable standard of conduct required of
Indemnitee and for which the indemnification claim is based;
and
(ii) as of the date of such payment or reimbursement,
a determination has not been made, in the manner provided in
Section 4 of this Agreement, that the facts then known to
those making the determination would preclude indemnification
under this Agreement.
(b) Indemnitee hereby undertakes that Indemnitee shall repay
to the Corporation any amount advanced under this Agreement if an to
the extent that it is ultimately determined that Indemnitee is not
entitled to such indemnification.
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Section 6. Establishment of Trust. In the event of a Potential Change
in Control of the Corporation, the Corporation shall, upon written request by
Indemnitee, create a trust for the benefit of the Indemnitee and from time to
time upon written request of Indemnitee shall fund the trust in an amount
sufficient to satisfy any and all Expenses or Resolution Costs that may properly
be subject to indemnification under Section 3 above anticipated at the time of
each request. The amount or amounts to be deposited in the trust pursuant to
this funding obligation shall be determined by a majority vote of a quorum
consisting of directors who are Continuing Directors and not parties to the
Proceeding or by the Chief Executive Officer of the Corporation. If all of those
individuals are parties to the Proceeding, the amount or amounts to be deposited
in the trust shall be determined by independent legal counsel. The terms of the
trust shall provide that upon a Change in Control (i) the trust shall not be
revoked or the principal of the trust fund invaded, without the written consent
of the Indemnitee; (ii) the trustee shall advance, within two (2) business days
of a request by the Indemnitee, any amount properly payable to Indemnitee under
Sections 4 or 5 of this Agreement; (iii) the trust shall continue to be funded
by the Corporation in accordance with the funding obligation set forth above;
(iv) the trustee shall promptly pay to the Indemnitee all amounts that the
Indemnitee shall be entitled to indemnification pursuant to this Agreement or
otherwise; and (v) all unexpended funds in the trust shall revert to the
Corporation upon a final determination by a court of competent jurisdiction that
the Indemnitee has been fully indemnified under the terms of this Agreement. The
trustee shall be chosen by the party determining the initial funding of the
trust and shall be a national or state bank having a combined capital and
surplus of not less than $20,000,000. At the time of each draw from the trust
fund, the Indemnitee shall provide the trustee with a written request providing
that Indemnitee undertakes to repay the amount to the extent that it is
ultimately determined that Indemnitee is not entitled to indemnification. Any
funds, including interest or investment earnings, remaining in the trust fund
shall revert and be paid to the Corporation if (i) a Change in Control has not
occurred; and (ii) if the Board of Directors by vote of a majority of a quorum
consisting of Continuing Directors determines that the circumstances giving rise
to that particular funding of the trust no longer exists. Nothing in this
section shall relieve the Corporation of any of its obligations under this
Agreement.
Section 7. Partial Indemnification; Successful Defense. If Indemnitee
is entitled under any provision of this Agreement to indemnification, or advance
payment or reimbursement by the Corporation for some portion of the Expenses or
Resolution Costs incurred by Indemnitee, but not for the total amount, the
Corporation shall nevertheless indemnify Indemnitee or advanced payment or
reimbursement for the portion of such Expenses or Resolution Costs to which
Indemnitee is entitled. 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 therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses and Resolutions Costs
incurred in connection with such Proceeding.
Section 8. Consent to Settlement. Unless and until a Change in Control
has occurred, the Corporation shall not be liable to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any Proceeding made without
the Corporation's written consent. The Corporation shall not settle any
Proceeding in any manner that would impose any penalty or limitation on
Indemnitee or involve an admission of illegal conduct without Indemnitee's
written consent. Neither the Corporation nor the Indemnitee will unreasonably
withhold their consent to any proposed settlement.
Section 9. Severability. If this Agreement or any portion hereof
(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 10. Indemnification Hereunder Not Exclusive. The
indemnification provided by this Agreement shall be in addition to any other
rights to which Indemnitee may be entitled under the Articles of Incorporation
or Bylaws of the Corporation, any agreement, any vote of shareholders or
disinterested directors, the Michigan Business Corporation Act, or otherwise,
both as to actions in Indemnitee's official capacity and as to actions in
another capacity while holding such office.
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Section 11. 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), conviction, or upon a plea
of nolo contenders, 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 12. Liability Insurance. If the Corporation maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by the policy or policies to the maximum
extent of the coverage available for any director or officer of the Corporation.
Indemnitee may be covered by the policy or policies whether or not the
Corporation would have the power to indemnify him or her against liability under
Sections 561 to 565 of the Michigan Business Corporation Act.
Section 13. Subrogation. In the event of 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 documents reasonably
required and shall take all reasonable actions necessary to secure such rights,
including the execution of such documents necessary to enable the Corporation to
effectively bring suit to enforce such rights.
(a)
Section 14. No Duplication of Payments. 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 hereunder.
Section 15. Notice. Any notice or other communication required under
this Agreement shall be in writing and delivered or sent by postage prepaid
first class mail, as follows:
If to the Corporation:
Autocam Corporation
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Secretary (or to any other
individual or address that the Corporation designates in
writing to Indemnitee)
If to Indemnitee:
Addressed to the address provided in this Agreement or such other
address as Indemnitee may designate by written notice to the
Corporation.
Notice shall be deemed received three days after the date postmarked if properly
addressed. The Corporation may designate any other address in writing to
Indemnitee.
Section 6. 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 17. 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 foreign or domestic corporation, partnership, joint
venture, trust, or other enterprise, whether for profit or not, in which
Indemnitee served in any such capacity at the request of the Corporation.
Section 18. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of 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 the Corporation, and spouses, heirs, administrators and personal
and legal representatives of Indemnitee.
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Section 19. 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 such state without giving effect to the
principles of conflicts of laws, and the federal laws of the United States of
America.
Section 20. Period of Limitations. No legal action shall be brought and
no cause of action shall be asserted by or on behalf of the Corporation or any
affiliate of the Corporation against Indemnitee, Indemnitee's spouse, heirs,
administrators or personal or legal representatives after the expiration of one
(1) year from the date of accrual of the cause of action, and any claim or cause
of action of the Corporation or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within the one
(1) year period; provided, however, that if any shorter period of limitations is
otherwise applicable to any cause of action the shorter period shall govern.
Section 21. Amendments; Waiver. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto 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 hereof (whether
or not similar) nor shall such waiver constitute a continuing waiver.
The parties have executed this Agreement as of the date stated in the
first paragraph of the Agreement.
AUTOCAM CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-------------------
Its: President
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INDEMNITEE:
/s/ Individual Director's Name
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Address: /s/ Individual Director's Address
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