INDEMNIFICATION AGREEMENT
Exhibit 10.1
This Indemnification Agreement (the “Agreement”) is made as of by and between
Milacron Inc., a Delaware corporation (the “Company”), and , a director and/or
officer of the Company (“Indemnitee”).
RECITALS
WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company.
WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining liability
insurance for the Company’s directors and officers, the significant and continual increases in the
cost of such insurance and the general trend of insurance companies to reduce the scope of coverage
of such insurance.
WHEREAS, the Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors and officers to expensive litigation risks at the same
time as the availability and scope of coverage of liability insurance provide increasing challenges
for the Company.
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased
difficulty in attracting and retaining highly qualified persons such as Indemnitee 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.
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, Indemnitee on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company. Indemnitee agrees to begin or to continue to
serve as a director or officer of the Company. Indemnitee may at any time and for any reason resign
from such position (subject to any other contractual obligation or any obligation imposed by
operation of law), in which event the Company shall have no obligation under this Agreement to
continue Indemnitee in such position. This Agreement shall not be deemed an employment contract
between Indemnitee and the Company (or any of its subsidiaries or any other entity of which
Indemnitee is or was serving in any capacity at the request of the Company). The foregoing
notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a
director or officer of the Company.
Section 2. Right to Indemnification. The Company shall to the fullest extent
permitted by applicable law as then in effect indemnify Indemnitee, if Indemnitee is or was
involved in any manner (including, without limitation, as a party or a witness) or is threatened to
be made so involved in any threatened, pending or completed investigation, claim, action, suit or
proceeding,
whether civil, criminal, administrative or investigative (including, without limitation, any
action, suit or proceeding brought by or in the right of the Company to procure a judgment in its
favor) (a “Proceeding”) by reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit plan), against all expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such Proceeding; provided, however, that,
except as provided in Section 5(d), the foregoing shall not apply to any part of a Proceeding that
was commenced by Indemnitee prior to a Change in Control (as hereinafter defined). Such
indemnification shall be a contract right. Subject to the applicable provisions of Section 5(a)
hereof, Indemnitee shall also have the right to receive from the Company payment of any expenses
incurred by Indemnitee in connection with any such Proceeding in advance of the final disposition
of such Proceeding, consistent with the provisions of applicable law as then in effect. All
references in this Agreement to the “applicable law as then in effect” refer to such law as it
exists as of the date of this Agreement or as such law may hereafter be amended (but, in the case
of such amendment, only to the extent that such amendment permits the Company to provide broader
indemnification or advancement rights than such law permitted the Company to provide prior to such
amendment).
Section 3. Insurance, Contracts and Funding. The Company may purchase and maintain
insurance to protect itself and Indemnitee against any expenses, judgments, fines and amounts paid
in settlement as specified in this Agreement or incurred by any such person in connection with any
Proceeding referred to in this Agreement, to the fullest extent permitted by applicable law as then
in effect. The Company may enter into contracts with Indemnitee in furtherance of the provisions of
this Agreement and may create a trust fund, grant a security interest or use other means
(including, without limitation, a letter of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification as provided in this Agreement.
Section 4. Indemnification; Not Exclusive Right. The right of indemnification and
advancement of expenses provided in this Agreement shall not be exclusive of any other rights to
which Indemnitee may otherwise be entitled. The provisions of this Agreement shall inure to the
benefit of the heirs and legal representatives of Indemnitee and shall be applicable to Proceedings
commenced or continuing after the execution of this Agreement by the parties hereto, whether
arising from acts or omissions occurring before or after such execution.
Section 5. Advancement of Expenses; Procedures; Presumptions and Effect of Certain
Proceedings; Remedies. The following procedures, presumptions and remedies shall apply with
respect to advancement of expenses and the right to indemnification under this Agreement:
(a) Advancement of Expenses. All reasonable expenses incurred by or on behalf of Indemnitee
in connection with, and prior to the final disposition of, any Proceeding shall be advanced to
Indemnitee by the Company within 20 calendar days after the receipt by the Company of a statement
or statements from Indemnitee requesting such advance or advances from time to time, whether such
statement or statements are received prior to or after final disposition of such Proceeding.
Indemnitee shall include with such statement or statements evidence of the expenses incurred by
Indemnitee and, if required by law at the time of such advance, shall include or be accompanied by
an undertaking by or on behalf of Indemnitee to repay the amounts advanced if it
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should ultimately be determined that Indemnitee is not entitled to be indemnified against such
expenses pursuant to this Agreement.
(b) Procedure for Determination of Entitlement to Indemnification.
(i) To obtain indemnification under this Agreement, Indemnitee shall submit to the Secretary
of the Company a written request therefor. If the Company intends to determine whether Indemnitee
is entitled to indemnification pursuant to this Agreement, the Company shall deliver to Indemnitee
written notice of such intent (such notification, an “Election Notice”) within 15 calendar days of
the Secretary’s receipt of Indemnitee’s written request for indemnification. If the Company
delivers an Election Notice in accordance with the preceding sentence, the determination of
Indemnitee’s entitlement to indemnification shall be made not later than 90 calendar days after the
later of receipt by the Company of the written request for indemnification or final disposition of
the Proceeding. The Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has requested
indemnification.
(ii) If the Company has delivered to Indemnitee an Election Notice within the 15-day period
set forth in Section 5(b)(i), Indemnitee’s entitlement to indemnification under this Agreement
shall be determined in one of the following ways: (A) by a majority vote of the Disinterested
Directors (as hereinafter defined), even though less than a quorum; (B) by a committee of such
Disinterested Directors designated by a majority vote of the Disinterested Directors, even though
less than a quorum; (C) by a written opinion of Independent Counsel (as hereinafter defined)
selected by a majority of the Disinterested Directors; or (D) by the stockholders of the Company
(but only if a majority of the Disinterested Directors presents the issue of entitlement to
indemnification to the stockholders for their determination). Promptly following the Company’s
receipt of a written request for indemnification, a majority of the Disinterested Directors shall
decide who shall determine the issue of entitlement to indemnification, and the Company shall
promptly notify Indemnitee of such decision. Notwithstanding the preceding sentences of this
Section 5(b)(ii), Indemnitee’s entitlement to indemnification shall be determined by Independent
Counsel if (1) Indemnitee demands a determination by Independent Counsel in the written request for
indemnification required by Section 5(b)(i) and identifies in such written request the person or
persons who Indemnitee wishes to select as Independent Counsel and (2) such written request for
indemnification is delivered to the Company following a Change in Control.
(iii) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel, the Independent Counsel selected by a majority of the Disinterested Directors
or Indemnitee (as applicable) shall be Independent Counsel to which the Indemnitee or a majority of
the Disinterested Directors (as applicable) does not reasonably object; provided that such
objection must be delivered promptly following such selection.
(c) Presumptions and Effect of Certain Proceedings. Except as otherwise expressly provided
in this Agreement, Indemnitee shall be presumed to be entitled to indemnification under this
Agreement upon submission of a request for indemnification in accordance with Section 5(b)(i), and
thereafter the Company shall have the burden of proof to overcome that presumption in reaching a
contrary determination. The termination of any Proceeding described in Section 2, 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, of itself, adversely affect the right of Indemnitee to
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indemnification or create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that
his conduct was unlawful.
(d) Remedies of Indemnitee.
(i) In the event that a determination is made pursuant to Section 5(b) that Indemnitee is not
entitled to indemnification under this Agreement, or in the event no determination is made within
the 90-day period specified in Section 5(b)(i), or in the event the Company does not deliver an
Election Notice to Indemnitee within the 15-day period set forth in Section 5(b)(i), (A) Indemnitee
shall be entitled to seek an adjudication of his entitlement to such indemnification either, at
Indemnitee’s sole option, in the Court of Chancery of the State of Delaware or any other court of
competent jurisdiction or an arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association; (B) any such judicial proceeding or arbitration
shall be de novo and Indemnitee shall not be prejudiced by reason of an adverse determination that
Indemnitee is not entitled to indemnification; and (C) in any such judicial proceeding or
arbitration the Company shall have the burden of proving that Indemnitee is not entitled to
indemnification under this Agreement. In any suit brought by Indemnitee to enforce a right to
indemnification hereunder it shall be a defense that Indemnitee has not met any applicable standard
for indemnification set forth in applicable law.
(ii) If a determination shall have been made, pursuant to Section 5(b), that Indemnitee is
entitled to indemnification, the Company shall be obligated to pay the amounts constituting such
indemnification within five days after such determination has been made and shall be conclusively
bound by such determination unless (A) Indemnitee misrepresented or failed to disclose a material
fact in making the request for indemnification or in submitting information to the Company to aid
it in such determination or (B) such indemnification is prohibited by law. In the event that
advancement of expenses is not timely made pursuant to Section 5(a) or payment of indemnification
is not made within five calendar days after a determination of entitlement to indemnification has
been made pursuant to Section 5(b), Indemnitee shall be entitled to seek judicial enforcement of
the Company’s obligation to pay to Indemnitee such advancement of expenses or indemnification.
Notwithstanding the foregoing, the Company may bring an action, in the Court of Chancery of the
Sate of Delaware or any other court of competent jurisdiction, contesting the right of Indemnitee
to receive indemnification hereunder due to the occurrence of an event described in subclause (A)
or (B) of this clause (ii) (a “Disqualifying Event”); provided, however, that in any such action
the Company shall have the burden of proving the occurrence of such Disqualifying Event.
(iii) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 5(d) that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.
(iv) In the event that Indemnitee, pursuant to this Section 5(d), seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to recover damages for
breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be
indemnified by the Company against, any expenses actually and reasonably incurred by Indemnitee if
Indemnitee prevails in such judicial adjudication or arbitration. If it shall be determined in
such
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judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be prorated accordingly.
(e) Definitions. For purposes of this Section 5:
(i) “Change in Control” means a change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) (or any successor provision) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 (the “Act”), whether or not
the Company is then subject to such reporting requirement; provided that, without limitation, such
a change in control shall be deemed to have occurred if (A) any “person” (as such term is used in
Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company’s then outstanding securities without the prior approval
of at least two-thirds of the members of the Board of Directors in office immediately prior to such
acquisition; (B) the Company is a party to any merger or consolidation in which the Company is not
the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock
would be converted into cash, securities or other property, other than a merger of the Company in
which the holders of the Company’s Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately after the merger;
(C) there is a sale, lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, the assets of the Company, or a liquidation or
dissolution of the Company; or (D) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (including for this purpose any new
director whose election or nomination for election by the Company’s stockholders or appointment by
Company directors was approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of such period or who were previously so approved
by such two-thirds vote) cease for any reason to constitute at least a majority of the Board of
Directors.
(ii) “Disinterested Director” means a director of the Company who is not or was not a party
to the Proceeding in respect of which indemnification is sought by Indemnitee.
(iii) “Independent Counsel” means a law firm or a member of a law firm that neither presently
is, nor in the past five years has been, retained to represent (a) the Company or Indemnitee in any
matter material to either such party or (b) any other party to the Proceeding giving rise to a
claim for indemnification under this Agreement. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing under the law of the State of Delaware, would have a conflict
of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s
rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of
Independent Counsel and to fully indemnify such counsel against any and all expenses, claims,
liabilities and damages arising out of or relating to the Agreement or such Independent Counsel’s
engagement pursuant hereto.
Section 6. 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,
all
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portions of any section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that are not themselves 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, all portions of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
Section 7. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby to induce Indemnitee to begin or to continue to serve
as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying
upon this Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and understandings, oral, written
and implied, between the parties hereto with respect to the subject matter hereof; provided,
however, that this Agreement is a supplement to and in furtherance of the Charter, By-Laws and
applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder.
Section 8. Amendment and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties hereto. 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 nor shall any waiver constitute a continuing waiver.
Section 9. Applicable Law. This Agreement and the legal relations among the parties
shall be governed by, and construed and enforced in accordance with, the laws of the State of
Delaware, without regard to its conflict of laws rules.
Section 10. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought need be produced to evidence the existence of this
Agreement.
Section 11. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have been duly given
when delivered by hand or when mailed by certified mail, return receipt requested, with postage
prepaid:
A. If to Indemnitee to:
________________________
________________________
________________________
________________________
________________________
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or to such other person or address as Indemnitee shall furnish to the Company in writing pursuant
to the above.
B. If to the Company to:
or to such other person or address as the Company shall furnish to Indemnitee in writing pursuant
to the above.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.
| MILACRON INC. (“Company”) |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Chairman, President and Chief Executive Officer | |||
| INDEMNITEE | ||||
| Name: |
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