FORM OF DIRECTOR INDEMNIFICATION AGREEMENT
Exhibit 10.8
This Director Indemnification Agreement, dated as of July 6, 2006 (this “Agreement”), is
made by and between Xxxxxx Aluminum Corporation, a Delaware corporation (the “Company”), and
[___] (“Indemnitee”).
RECITALS
A. Section 141 of the General Corporation Law of the State of Delaware provides that the
business and affairs of a corporation shall be managed by or under the direction of its board of
directors.
B. By virtue of the managerial prerogatives vested in the directors of a Delaware corporation,
directors act as fiduciaries of the corporation and its stockholders.
C. Thus, it is critically important to the Company and its stockholders that the Company be
able to attract and retain the most capable persons reasonably available to serve as directors of
the Company.
D. In recognition of the need for corporations to be able to induce capable and responsible
persons to accept positions in corporate management, Delaware law authorizes (and in some instances
requires) corporations to indemnify their directors and officers, and further authorizes
corporations to purchase and maintain insurance for the benefit of their directors and officers.
E. The Delaware courts have recognized that indemnification by a corporation serves the dual
policies of (1) allowing corporate officials to resist unjustified lawsuits, secure in the
knowledge that, if vindicated, the corporation will bear the expense of litigation and (2)
encouraging capable women and men to serve as corporate directors and officers, secure in the
knowledge that the corporation will absorb the costs of defending their honesty and integrity.
F. The indemnification of directors and officers by a corporation serves as an important
supplement to directors’ and officers’ liability insurance and as a replacement for such insurance
in circumstances where such insurance is unavailable.
G. The number of lawsuits challenging the judgment and actions of directors of Delaware
corporations, the costs of defending those lawsuits and the threat to directors’ personal assets
have all materially increased over the past several years, chilling the willingness of capable
women and men to undertake the responsibilities imposed on corporate directors.
H. Recent federal legislation and rules adopted by the Securities and Exchange Commission and
the national securities exchanges and the National Association of Securities Dealers, Inc. have
imposed additional disclosure and corporate governance obligations on directors and officers of
public companies and have exposed such directors and officers to new and substantially broadened
civil liabilities.
I. These legislative and regulatory initiatives have also exposed directors of public
companies to a significantly greater risk of criminal proceedings, with attendant defense costs and
potential criminal fines and penalties.
J. Under Delaware law, a director’s right to be reimbursed for the costs of defense of
criminal actions, whether such claims are asserted under state or federal law, does not depend upon
the merits of the claims asserted against the director and is separate and distinct from any right
to indemnification the director may be able to establish, and indemnification of the director
against criminal fines and penalties is permitted if the director satisfies the applicable standard
of conduct.
K. Indemnitee is a director of the Company and does not regard the protection afforded to
him/her by Delaware law and the Company’s certificate of incorporation and bylaws (collectively,
the “Constituent Documents”) as adequate, and his/her willingness to serve in such capacity is
predicated, in substantial part, upon (1) the Company’s willingness to provide protection to
him/her pursuant to express contract rights providing for the Company to indemnify him/her in
accordance with the principles reflected above, to the fullest extent permitted by Delaware law,
and (2) the other undertakings set forth in this Agreement.
L. Therefore, in recognition of the need to provide Indemnitee with substantial protection
against personal liability, in order to procure Indemnitee’s continued service as a director of the
Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in
order to provide such protection pursuant to express contract rights (intended to be enforceable
irrespective of, among other things, any amendment to the Constituent Documents, any change in the
composition of the Company’s Board of Directors (the “Board”) or any change-in-control or business
combination transaction relating to the Company), the Company wishes to provide in this Agreement
for (1) the indemnification of and the advancement of Expenses (as defined in Section 1(e)) to
Indemnitee as set forth in this Agreement as a supplement to, and in furtherance of, the
indemnification provided by the Constituent Documents or resolutions of the Board and (2) the
continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance
policies.
M. In light of the factors referred to in the preceding recitals, it is the Company’s
intention and desire that the provisions of this Agreement be construed liberally, subject to their
express terms, to maximize the protections to be provided to Indemnitee hereunder.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the parties hereby agree as follows:
1. Certain Definitions. In addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement with initial capital letters:
(a) “Change in Control” means the occurrence on or after the date of this Agreement of any of
the following events:
(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 35% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:
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(A) for purposes of this Section 1(a)(i), the following acquisitions shall not constitute a
Change in Control: (1) any acquisition of Voting Stock of the Company directly from the Company (x)
pursuant to the Second Amended Joint Plan of Reorganization of Xxxxxx Aluminum Corporation, Xxxxxx
Aluminum & Chemical Corporation and Certain of Their Debtor Affiliates, as modified, filed
pursuant to section 1121(a) of title 11 of the United States Code and confirmed by an order of the
United States Bankruptcy Court for the District of Delaware entered on February 6, 2006, which
confirmation order was affirmed by an order of the United States District Court for the District of
Delaware entered on May 11, 2006 (the “Plan”), or (y) that is approved by a majority of the
Incumbent Directors, (2) any acquisition of Voting Stock of the Company by the Company or any
Subsidiary, (3) any acquisition of Voting Stock of the Company by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary (other than any voluntary
employee beneficiary association established in connection with the Plan), and (4) any acquisition
of Voting Stock of the Company by any Person pursuant to a Business Combination that complies with
clauses (A), (B) and (C) of Section 1(a)(iii) below;
(B) if any Person acquires beneficial ownership of 35% or more of combined voting power of the
then-outstanding Voting Stock of the Company as a result of a transaction described in clause
(A)(1) of Section 1(a)(i) and such Person thereafter becomes the beneficial owner of any additional
shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock
of the Company, other than in an acquisition directly from the Company pursuant to the Plan, in an
acquisition directly from the Company in a transaction that is approved by a majority of the
Incumbent Directors or other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Voting Stock are treated equally, such
subsequent acquisition shall be deemed to constitute a Change in Control;
(C) a Change in Control will not be deemed to have occurred if a Person acquires beneficial
ownership of 35% or more of the Voting Stock of the Company as a result of a reduction in the
number of shares of Voting Stock of the Company outstanding unless and until such Person thereafter
becomes the beneficial owner of any additional shares of Voting Stock of the Company representing
1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition
directly from the Company pursuant to the Plan, in an acquisition directly from the Company in a
transaction that is approved by a majority of the Incumbent Directors or other than as a result of
a stock dividend, stock split or similar transaction effected by the Company in which all holders
of Voting Stock are treated equally; and
(D) if at least a majority of the Incumbent Directors determine in good faith that a Person
has acquired beneficial ownership of 35% or more of the Voting Stock of the Company inadvertently,
and such Person divests as promptly as practicable a sufficient number of shares so that such
Person beneficially owns less than 35% of the Voting Stock of the Company, then no Change in
Control shall have occurred as a result of such Person’s acquisition; or
(ii) a majority of the Directors are not Incumbent Directors; or
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(iii) the consummation of a reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of assets
of another corporation or other entity, or other transaction (each, a “Business Combination”),
unless, in each case, immediately following such Business Combination (A) all or substantially all
of the individuals and entities who were the beneficial owners of Voting Stock of the Company
immediately prior to such Business Combination beneficially own, directly or indirectly, more than
60% of the combined voting power of the then outstanding shares of Voting Stock of the entity
resulting from such Business Combination (including without limitation an entity which as a result
of such transaction owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity
resulting from such Business Combination, any employee benefit plan (or related trust) sponsored or
maintained by the Company, any Subsidiary or such entity resulting from such Business Combination
(other than any voluntary employee beneficiary association established in connection with the Plan)
or any Person that immediately prior to such Business Combination owns, directly or indirectly, 35%
or more of the Voting Stock of the Company so long as such Person does not at such time own,
directly or indirectly, more than 1% of the securities of the other corporation or other entity
involved in such Business Combination to be converted into or exchanged for shares of Voting Stock
of the entity resulting from such Business Combination pursuant to such Business Combination))
beneficially owns, directly or indirectly, 35% or more of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C)
at least a majority of the members of the Board of Directors of the entity resulting from such
Business Combination were Incumbent Directors at the time of the execution of the initial agreement
or of the action of the Board providing for such Business Combination; or
(iv) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C)
of Section 1(a)(iii).
(v) For purposes of this Section 1(a) and as used elsewhere in this Agreement, the following
terms shall have the following meanings:
(A) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(B) “Incumbent Directors” means the individuals who, as of the date hereof, are Directors of
the Company and any individual becoming a Director subsequent to the date hereof whose election,
nomination for election by the Company’s stockholders, or appointment was approved by a vote of at
least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for director without
objection to such nomination); provided, however, that an individual shall not be an Incumbent
Director if such individual’s election or appointment to the Board occurs as a result of an actual
or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to
the election or removal of Directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.
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(C) “Subsidiary” means an entity in which the Company directly or indirectly beneficially owns
50% or more of the outstanding Voting Stock.
(D) “Voting Stock” means securities entitled to vote generally in the election of directors
(or similar governing bodies).
(b) “Claim” means (i) any threatened, asserted, pending or completed claim, demand, action,
suit or proceeding, whether civil, criminal, administrative, arbitrative, investigative or other,
whether made pursuant to federal, state or other law and whether or not Indemnitee is a party
thereto; (ii) any threatened, pending or completed inquiry or investigation, whether formal or
informal, whether made, instituted or conducted by the Company or any other person, including
without limitation any federal, state or other governmental entity, and whether or not Indemnitee
is the subject of such inquiry or investigation, that Indemnitee determines might lead to the
institution of any such claim, demand, action, suit or proceeding; or (iii) any threatened,
asserted, pending or completed appeal in connection with any such claim, demand, action, suit or
proceeding.
(c) “Controlled Affiliate” means any corporation, limited liability company, partnership,
joint venture, trust or other entity or enterprise, whether or not for profit, that is directly or
indirectly controlled by the Company. For purposes of this definition, “control” means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of an entity or enterprise, whether through the ownership of voting securities, through
other voting rights, by contract or otherwise; provided that direct or indirect beneficial
ownership of capital stock or other interests in an entity or enterprise entitling the holder to
cast 10% or more of the total number of votes generally entitled to be cast in the election of
directors (or persons performing comparable functions) of such entity or enterprise shall be deemed
to constitute control for purposes of this definition.
(d) “Disinterested Director” means a director of the Company who is not and was not a party to
the Claim in respect of which indemnification is sought by Indemnitee.
(e) “Expenses” means attorneys’ and experts’ fees and expenses, including without limitation
retainers, and all other costs and expenses paid or payable in connection with investigating,
defending, being a witness in or participating in (including on appeal), or preparing to
investigate, defend, be a witness in or participate in (including on appeal), any Claim, including
without limitation court costs, transcript costs, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees and the premium,
security for and other costs relating to any costs bond, supersedeas bond or other appeal bond or
its equivalent.
(f) “Indemnifiable Claim” means any Claim based upon, arising out of or resulting from (i) any
actual, alleged or suspected act or failure to act by Indemnitee in his or her capacity as a
director, officer, employee or agent of the Company or as a director, officer, employee, member,
manager, trustee or agent of any other corporation, limited liability company, partnership, joint
venture, trust or other entity or enterprise, whether or not for profit, as to which Indemnitee is
or was serving at the request of the Company as a director, officer, employee, member, manager,
trustee or agent, (ii) any actual, alleged or suspected act or failure to act by Indemnitee in
respect of any business, transaction, communication, filing, disclosure or other activity of the
Company or any other entity or enterprise referred to in clause (i) of this
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sentence, or (iii) Indemnitee’s status as a current or former director, officer, employee or
agent of the Company or as a current or former director, officer, employee, member, manager,
trustee or agent of the Company or any other entity or enterprise referred to in clause (i) of this
sentence or any actual, alleged or suspected act or failure to act by Indemnitee in connection with
any obligation or restriction imposed upon Indemnitee by reason of such status. In addition to any
service at the actual request of the Company, for purposes of this Agreement, Indemnitee shall be
deemed to be serving or to have served at the request of the Company as a director, officer,
employee, member, manager, trustee or agent of another entity or enterprise if Indemnitee is or was
serving as a director, officer, employee, member, manager, trustee or agent of such entity or
enterprise and (i) such entity or enterprise is or at the time of such service was a Controlled
Affiliate, (ii) such entity or enterprise is or at the time of such service was an employee benefit
plan (or related trust) sponsored or maintained by the Company or a Controlled Affiliate (including
any voluntary employee beneficiary association established in connection with the Plan), or (iii)
the Company or a Controlled Affiliate directly or indirectly caused or authorized Indemnitee to be
nominated, elected, appointed, designated, employed, engaged or selected to serve in such capacity.
(g) “Indemnifiable Losses” means any and all Losses relating to, arising out of or resulting
from any Indemnifiable Claim.
(h) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent: (i) the Company (or any Subsidiary) or Indemnitee in any matter material to either
such party (other than with respect to matters concerning the Indemnitee under this Agreement, or
of other indemnitees under similar indemnification agreements), or (ii) any other named (or, as to
a threatened matter, reasonably likely to be named) party to the Indemnifiable Claim giving rise to
a claim for indemnification hereunder. 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 Indemnitee
in an action to determine Indemnitee’s rights under this Agreement.
(i) “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines,
taxes, penalties (whether civil, criminal or other) and amounts paid in settlement, including
without limitation all interest, assessments and other charges paid or payable in connection with
or in respect of any of the foregoing.
2. Indemnification Obligation. Subject to Section 7, the Company shall indemnify, defend and
hold harmless Indemnitee, to the fullest extent permitted or required by the laws of the State of
Delaware in effect on the date hereof or as such laws may from time to time hereafter be amended to
increase the scope of such permitted indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided, however, that, except as provided in Sections 4 and 20, Indemnitee
shall not be entitled to indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim.
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3. Advancement of Expenses. Indemnitee shall have the right to advancement by the Company
prior to the final disposition of any Indemnifiable Claim of any and all Expenses relating to,
arising out of or resulting from any Indemnifiable Claim paid or incurred by Indemnitee or which
Indemnitee determines are reasonably likely to be paid or incurred by Indemnitee. Indemnitee’s
right to such advancement is not subject to the satisfaction of any standard of conduct. Without
limiting the generality or effect of the foregoing, within five business days after any request by
Indemnitee (which request may be made at any time and from time to time as Indemnitee determines),
the Company shall, in accordance with such request (but without duplication), (a) pay such Expenses
on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such
Expenses, or (c) reimburse Indemnitee for such Expenses. Indemnitee hereby undertakes to repay,
without interest, any amounts actually paid, advanced or reimbursed by the Company in respect of
Expenses relating to, arising out of or resulting from any Indemnifiable Claim in respect of which
it shall have been determined, following the final disposition of such Indemnifiable Claim and in
accordance with Section 7, that Indemnitee is not entitled to indemnification hereunder.
Indemnitee shall not be required to execute and deliver to the Company any further undertaking in
connection with any such payment, advancement or reimbursement. The Company acknowledges that
Indemnitee’s undertaking set forth above shall not be secured and hereby accepts such undertaking
without reference to Indemnitee’s ability to repay the Expenses.
4. Indemnification for Additional Expenses. Without limiting the generality or effect of the
foregoing, the Company shall indemnify and hold harmless Indemnitee against and, if requested by
Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five business days of
such request, any and all Expenses paid or incurred by Indemnitee or which Indemnitee determines
are reasonably likely to be paid or incurred by Indemnitee in connection with any Claim made,
instituted or conducted by Indemnitee for (a) indemnification or reimbursement or advance payment
of Expenses by the Company under any provision of this Agreement, or under any other agreement or
provision of the Constituent Documents now or hereafter in effect relating to Indemnifiable Claims,
and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by
the Company, regardless in each case of whether Indemnitee ultimately is determined to be entitled
to such indemnification, reimbursement, advance or insurance recovery, as the case may be;
provided, however, that Indemnitee shall return, without interest, any such advance of Expenses (or
portion thereof) which remains unspent at the final disposition of the Claim to which the advance
related.
5. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any Indemnifiable Loss, but not for all of
the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled.
6. Procedure for Notification. To obtain indemnification under this Agreement in respect of
an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall submit to the Company a written
request therefor, including a brief description (based upon information then available to
Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of
such request, the Company has directors’ and officers’ liability insurance in effect under which
coverage for such Indemnifiable Claim or Indemnifiable Loss is potentially available, the Company
shall give prompt written notice of such Indemnifiable Claim or Indemnifiable Loss to the
applicable insurers in accordance with the procedures set forth in the
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applicable policies. The Company shall provide to Indemnitee a copy of such notice delivered
to the applicable insurers, and copies of all subsequent correspondence between the Company and
such insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each case substantially
concurrently with the delivery or receipt thereof by the Company. The failure by Indemnitee to
timely notify the Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve the
Company from any liability hereunder unless, and only to the extent that, the Company did not
otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and such failure results in
forfeiture by the Company of substantial defenses, rights or insurance coverage.
7. Determination of Right to Indemnification.
(a) To the extent that Indemnitee shall have been successful on the merits or otherwise in
defense of any Indemnifiable Claim or any portion thereof or in defense of any issue or matter
therein, including without limitation dismissal without prejudice, Indemnitee shall be indemnified
against all Indemnifiable Losses relating to, arising out of or resulting from such Indemnifiable
Claim in accordance with Section 2 and no Standard of Conduct Determination (as defined in Section
7(b)) shall be required.
(b) To the extent that the provisions of Section 7(a) are inapplicable to an Indemnifiable
Claim that shall have been finally disposed of, any determination of whether Indemnitee has
satisfied any applicable standard of conduct under Delaware law that is a legally required
condition precedent to indemnification of Indemnitee hereunder against Indemnifiable Losses
relating to, arising out of or resulting from such Indemnifiable Claim (a “Standard of Conduct
Determination”) shall be made as follows: (i) if a Change in Control shall not have occurred, or
if a Change in Control shall have occurred but Indemnitee shall have requested that the Standard of
Conduct Determination be made pursuant to this clause (i), (A) by a majority vote of the
Disinterested Directors, even if less than a quorum of the Board, (B) if such Disinterested
Directors so direct, by a majority vote of a committee of Disinterested Directors designated by a
majority vote of all Disinterested Directors, or (C) if there are no such Disinterested Directors,
by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be
delivered to Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee shall
not have requested that the Standard of Conduct Determination be made pursuant to clause (i), by
Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered
to Indemnitee. Indemnitee will cooperate with the person or persons making such Standard of
Conduct Determination, including without limitation providing to such person or persons, upon
reasonable advance request, any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary
to such determination. The Company shall indemnify and hold harmless Indemnitee against and, if
requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within five
business days of such request, any and all costs and expenses (including without limitation
attorneys’ and experts’ fees and expenses) incurred by Indemnitee in so cooperating with the person
or persons making such Standard of Conduct Determination.
(c) The Company shall use its reasonable best efforts to cause any Standard of Conduct
Determination required under Section 7(b) to be made as promptly as practicable. If (i) the person
or persons empowered or selected under Section 7 to make the Standard of Conduct Determination
shall not have made a determination within 30 days after the later of
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(A) receipt by the Company of written notice from Indemnitee advising the Company of the final
disposition of the applicable Indemnifiable Claim (the date of such receipt being the “Notification
Date”) and (B) the selection of an Independent Counsel, if such determination is to be made by
Independent Counsel, that is permitted under the provisions of Section 7(e) to make such
determination and (ii) Indemnitee shall have fulfilled his/her obligations set forth in the second
sentence of Section 7(b), then Indemnitee shall be deemed to have satisfied the applicable standard
of conduct; provided that such 30-day period may be extended for a reasonable time, not to exceed
an additional 30 days, if the person or persons making such determination in good faith requires
such additional time for the obtaining or evaluation or documentation and/or information relating
thereto.
(d) If (i) Indemnitee shall be entitled to indemnification hereunder against any Indemnifiable
Losses pursuant to Section 7(a), (ii) no determination of whether Indemnitee has satisfied any
applicable standard of conduct under Delaware law is a legally required condition precedent to
indemnification of Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has
been determined or deemed pursuant to Section 7(b) or (c) to have satisfied any applicable standard
of conduct under Delaware law which is a legally required condition precedent to indemnification of
Indemnitee hereunder against any Indemnifiable Losses, then the Company shall pay to Indemnitee,
within five business days after the later of (x) the Notification Date in respect of the
Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are related, out of which
such Indemnifiable Losses arose or from which such Indemnifiable Losses resulted and (y) the
earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) above shall
have been satisfied, an amount equal to the amount of such Indemnifiable Losses.
(e) If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to
Section 7(b), the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give
written notice to the Company advising it of the identity of the Independent Counsel so selected.
The Company may, within five business days after receiving written notice of selection from the
other, deliver to Indemnitee a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so selected does not
satisfy the criteria set forth in the definition of “Independent Counsel” in Section 1(h), and the
objection shall set forth with particularity the factual basis of such assertion. Absent a proper
and timely objection, the person or firm so selected shall act as Independent Counsel. If such
written objection is properly and timely made and substantiated, (i) the Independent Counsel so
selected may not serve as Independent Counsel unless and until such objection is withdrawn or a
court has determined that such objection is without merit and (ii) Indemnitee may, at his or her
option, select an alternative Independent Counsel and give written notice to the Company advising
the Company of the identity of the alternative Independent Counsel so selected, in which case the
provisions of the immediately preceding sentence and clause (i) of this sentence shall apply to
such subsequent selection and notice. If applicable, the provisions of clause (ii) of the
immediately preceding sentence shall apply to successive alternative selections. If no Independent
Counsel that is permitted under the foregoing provisions of this Section 7(e) to make the Standard
of Conduct Determination shall have been selected within 30 days after Indemnitee gives its initial
notice pursuant to the first sentence of this Section 7(e), either the Company or Indemnitee may
petition the Court of Chancery of the State of Delaware for resolution of any objection which shall
have been made by the Company to Indemnitee’s selection of Independent Counsel and/or for the
appointment as
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Independent Counsel of a person or firm selected by the Court or by the Company as the Court
shall designate, and the person or firm with respect to whom all objections are so resolved or the
person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay
all of the reasonable fees and expenses of the Independent Counsel incurred in connection with the
Independent Counsel’s determination pursuant to Section 7(b).
8. Presumption of Entitlement. In making any Standard of Conduct Determination, the person or
persons making such determination shall presume that Indemnitee has satisfied the applicable
standard of conduct, and the Company may overcome such presumption only by its adducing clear and
convincing evidence to the contrary. Indemnitee shall be fully protected, and a Standard of
Conduct Determination may not be adverse to Indemnitee, to the extent Indemnitee relied in good
faith upon the records of the Company or upon such information, opinions, reports or statements
presented to the Company by any of the Company’s officers or employees, or committees of the Board,
or by any other person as to matters Indemnitee believed were within such other person’s
professional or expert competence and who had been selected with reasonable care by or on behalf of
the Company, the Board or a committee of the Board. Any Standard of Conduct Determination that is
adverse to Indemnitee may be challenged by the Indemnitee in the Court of Chancery of the State of
Delaware. No determination by the Company (including without limitation by its directors or any
Independent Counsel) that Indemnitee has not satisfied any applicable standard of conduct shall be
a defense to any Claim by Indemnitee for indemnification or reimbursement or advance payment of
Expenses by the Company hereunder or create a presumption that Indemnitee has not met any
applicable standard of conduct.
9. No Other Presumptions.
(a) For purposes of this Agreement, the termination of any Claim by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a plea of nolo
contendere or its equivalent, will not create a presumption that Indemnitee did not meet any
applicable standard of conduct or that indemnification hereunder is otherwise not permitted.
(b) For purposes of this Agreement, the knowledge or actions, or failures to act, of another
person may not be imputed, attributed or charged to Indemnitee in connection with a determination
that Indemnitee has not met any applicable standard of conduct or that indemnification hereunder is
otherwise not permitted.
10. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other
rights Indemnitee may have under the Constituent Documents, or the substantive laws of the
Company’s jurisdiction of incorporation, any other contract or otherwise (collectively, “Other
Indemnity Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would
have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be
deemed to have such greater right hereunder and (b) to the extent that any change is made to any
Other Indemnity Provision which permits any greater right to indemnification than that provided
under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right
hereunder. The Company will not adopt any amendment to any of the Constituent Documents the effect
of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under this
Agreement or any Other Indemnity Provision.
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11. Liability Insurance and Funding. For the duration of Indemnitee’s service as a director
of the Company, and thereafter for so long as Indemnitee shall be subject to any pending or
possible Indemnifiable Claim, the Company shall use commercially reasonable efforts (taking into
account the scope and amount of coverage available relative to the cost thereof) to cause to be
maintained in effect with an insurance carrier having an AM Best rating of not less than A-VI
policies of directors’ and officers’ liability insurance providing coverage for directors and/or
officers of the Company that is at least substantially comparable in scope and amount to that
provided by the Company’s current policies of directors’ and officers’ liability insurance. The
Company shall provide Indemnitee with a copy of all directors’ and officers’ liability insurance
applications, binders, policies, declarations, endorsements and other related materials, and shall
provide Indemnitee with a reasonable opportunity to review and comment on the same. Without
limiting the generality or effect of the two immediately preceding sentences, the Company shall not
discontinue or significantly reduce the scope or amount of coverage from one policy period to the
next (i) without the prior approval thereof by a majority vote of the Incumbent Directors, even if
less than a quorum, or (ii) if at the time that any such discontinuation or significant reduction
in the scope or amount of coverage is proposed there are no Incumbent Directors, without the prior
written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed). In
all policies of directors’ and officers’ liability insurance obtained by the Company, Indemnitee
shall be named as an insured in such a manner as to provide Indemnitee the same rights and
benefits, subject to the same limitations, as are accorded to the Company’s directors and officers
most favorably insured by such policy. The Company may, but shall not be required to, 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 satisfy its obligations to
indemnify and advance expenses pursuant to this Agreement.
12. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee
against other persons or entities (other than Indemnitee’s successors), including without
limitation any entity or enterprise referred to in clause (i) of the definition of “Indemnifiable
Claim” in Section 1(f). Indemnitee shall execute all papers reasonably required to evidence such
rights (all of Indemnitee’s reasonable Expenses, including without limitation attorneys’ fees and
charges, related thereto to be reimbursed by or, at the option of Indemnitee, advanced by the
Company).
13. No Duplication of Payments. The Company shall not be liable under this Agreement to make
any payment to Indemnitee in respect of any Indemnifiable Losses to the extent Indemnitee has
otherwise actually received payment (net of Expenses incurred in connection therewith) under any
insurance policy, the Constituent Documents and Other Indemnity Provisions or otherwise (including
without limitation from any entity or enterprise referred to in clause (i) of the definition of
“Indemnifiable Claim” in Section 1(f)) in respect of such Indemnifiable Losses otherwise
indemnifiable hereunder.
14. Defense of Claims. The Company shall be entitled to assume the defense of any
Indemnifiable Claim, with counsel reasonably satisfactory to the Indemnitee, and after such counsel
has been retained the Company will not be liable to Indemnitee for any fees of other counsel
subsequently accrued by Indemnitee in connection therewith; provided that if Indemnitee believes,
after consultation with counsel selected by Indemnitee, that (a) the use of counsel chosen by the
Company to represent Indemnitee would present such counsel with an
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actual or potential conflict, (b) the named parties in any such Indemnifiable Claim (including
without limitation any impleaded parties) include both the Company and Indemnitee and Indemnitee
shall conclude that there may be one or more legal defenses available to him or her that are
different from or in addition to those available to the Company, or (c) any such representation by
such counsel would be precluded under the applicable standards of professional conduct then
prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law
firm plus, if applicable, local counsel in respect of any particular Indemnifiable Claim) at the
Company’s expense. If the Company assumes the defense of any Indemnifiable Claim and Indemnitee is
not entitled to retain separate counsel at the Company’s expense pursuant to the immediately
preceding sentence, Indemnitee shall be entitled to retain counsel at Indemnitee’s own expense and
participate therein. If the Company does not assume the defense of an Indemnifiable Claim, the
Company shall be entitled to participate therein. The Company shall not be liable to Indemnitee
under this Agreement for any amounts paid in settlement of any threatened or pending Indemnifiable
Claim effected without the Company’s prior written consent. The Company shall not, without the
prior written consent of the Indemnitee, effect any settlement of any threatened or pending
Indemnifiable Claim to which the Indemnitee is, or could have been, a party unless (i) such
settlement solely involves the payment of money (and such payment is not a fine) and includes a
complete and unconditional release of the Indemnitee from all liability on any claims that are the
subject matter of such Indemnifiable Claim without an admission of liability or wrongdoing on the
part of Indemnitee and (ii) the Company shall have agreed Indemnitee is entitled to indemnification
hereunder in respect of such Indemnifiable Claim. Neither the Company nor Indemnitee shall
unreasonably withhold its consent to any proposed settlement; provided that Indemnitee may withhold
consent to any settlement that does not provide a complete and unconditional release of Indemnitee.
15. Successors and Binding Agreement. (a) The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form and substance
satisfactory to Indemnitee and his or her counsel, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be required to perform if no
such succession had taken place. This Agreement shall be binding upon and inure to the benefit of
the Company and any successor to the Company, including without limitation any person acquiring
directly or indirectly all or substantially all of the business or assets of the Company whether by
purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be
deemed the “Company” for purposes of this Agreement), but shall not otherwise be assignable or
delegatable by the Company.
(b) This Agreement shall inure to the benefit of and be enforceable by the Indemnitee’s
personal or legal representatives, executors, administrators, heirs, distributees, legatees and
other successors.
(c) This Agreement is personal in nature and neither of the parties hereto shall, without the
consent of the other, assign or delegate this Agreement or any rights or obligations hereunder
except as expressly provided in Sections 15(a) and 15(b). Without limiting the generality or
effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable,
whether by pledge, creation of a security interest or otherwise, other than by a transfer by the
Indemnitee’s will or by the laws of descent and distribution,
and, in the event of
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any attempted assignment or transfer contrary to this Section 15(c), the Company shall have no
liability to pay any amount so attempted to be assigned or transferred.
(d) This Agreement shall continue in full force and effect after Indemnitee has ceased to be a
director of the Company.
16. Notices. For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to be given hereunder,
shall be in writing and shall be deemed to have been duly given when hand delivered or dispatched
by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return receipt requested,
postage prepaid or one business day after having been sent for next-day delivery by a nationally
recognized overnight courier service, addressed to either the Company (to the attention of the
Secretary of the Company) or to Indemnitee, as the case may be, at the applicable address shown on
the signature page hereto, or to such other address as such party may have furnished to the other
in writing and in accordance herewith, except that notices of changes of address will be effective
only upon receipt.
17. Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by and construed in accordance with the substantive laws of the State
of Delaware, without giving effect to the principles of conflict of laws of such State. The
Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the Chancery Court of
the State of Delaware for all purposes in connection with any action or proceeding which arises out
of, or relates to, this Agreement and agree that any action instituted under this Agreement shall
be brought only in the Chancery Court of the State of Delaware.
18. Validity. If any provision of this Agreement or the application of any provision hereof
to any person or circumstance is held invalid, unenforceable or otherwise illegal, the remainder of
this Agreement and the application of such provision to any other person or circumstance shall not
be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent, and only to the extent, necessary to make it enforceable, valid or legal.
In the event that any court or other adjudicative body shall decline to reform any provision of
this Agreement held to be invalid, unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties hereto shall take all such action as may be necessary
or appropriate to replace the provision so held to be invalid, unenforceable or otherwise illegal
with one or more alternative provisions that effectuate the purpose and intent of the original
provisions of this Agreement as fully as possible without being invalid, unenforceable or otherwise
illegal.
19. Miscellaneous. No provision of this Agreement may be waived, modified or discharged
unless such waiver, modification or discharge is agreed to in writing signed by Indemnitee and the
Company. No waiver by either party hereto at any time of any breach by the other party hereto, or
compliance with any condition or provision of this Agreement to be performed by such other party,
shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise, expressed or
implied with respect to the subject matter hereof have been made by either party that are not set
forth expressly in this Agreement.
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20. Legal Fees and Expenses. It is the intent of the Company that Indemnitee not be required
to incur legal fees and or other Expenses associated with the interpretation, enforcement or
defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and
expense thereof would substantially detract from the benefits intended to be extended to Indemnitee
hereunder. Accordingly, without limiting the generality or effect of any other provision hereof,
if it should appear to Indemnitee that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes or threatens to
take any action to declare this Agreement void or unenforceable, or institutes any litigation or
other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided
or intended to be provided to Indemnitee hereunder, the Company irrevocably authorizes the
Indemnitee from time to time to retain counsel of Indemnitee’s choice (other than the Company’s
in-house counsel), at the expense of the Company as hereafter provided, to advise and represent
Indemnitee in connection with any such interpretation, enforcement or defense, including without
limitation the initiation or defense of any litigation or other legal action, whether by or against
the Company or any director, officer, stockholder or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to Indemnitee’s entering into an
attorney-client relationship with such counsel, and in that connection the Company and Indemnitee
agree that a confidential relationship shall exist between Indemnitee and such counsel. Without
respect to whether Indemnitee prevails, in whole or in part, in connection with any of the
foregoing, the Company will pay and be solely financially responsible for any and all attorneys’
and related fees and expenses incurred by Indemnitee in connection with any of the foregoing.
21. Certain Interpretive Matters. Unless the context of this Agreement otherwise requires,
(a) “it” or “its” or words of either gender include both genders, (b) words using the singular or
plural number also include the plural or singular number, respectively, (c) the terms “hereof,”
“herein,” “hereby” and derivative or similar words refer to this entire Agreement, (d) the term
“Section” refers to the specified Section of this Agreement, and (e) the word “or” is disjunctive
but not exclusive. Whenever this Agreement refers to a number of days, such number will refer to
calendar days unless business days are specified and whenever action must be taken (including
without limitation the giving of notice or the delivery of documents) under this Agreement during a
certain period of time or by a particular date that ends or occurs on a non-business day, then such
period or date will be extended until the immediately following business day. As used herein,
“business day” means any day other than Saturday, Sunday or a United States federal holiday. All
terms defined in this Agreement will have such defined meanings when used in any document made or
delivered pursuant hereto unless otherwise defined. The Section headings contained in this
Agreement are inserted for convenience only and do not constitute a part of this Agreement.
22. Counterparts. This Agreement may be executed in two counterparts, each of which will be
deemed to be an original but both of which together shall constitute one and the same agreement.
[Signatures Appear On Following Page]
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IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized
representative to execute this Agreement as of the date first above written.
| XXXXXX ALUMINUM CORPORATION | ||||
| 00000 Xxxxxxx Xxxxxxx, Xxxxx 000 | ||||
| Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000 | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| [INDEMNITEE] [Address] |
||||
| [Indemnitee] | ||||
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