Contract
EXHIBIT
10.1
1. Indemnified Expenses shall be paid by the Company in advance of the final disposition of the Indemnified Proceeding in connection with which they were incurred within thirty days after receipt by the Company of (i) a statement or statements from Indemnitee requesting such advance or advances, with appropriate and reasonable documentation showing that such Indemnified Expenses have been incurred, and (ii) an undertaking by or on behalf of Indemnitee to repay such amount or amounts if and to the extent that it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company as authorized by this Agreement. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment. Advances shall be unsecured and interest-free.
This
Indemnification Agreement, dated and effective as of
___________________________, 2008, is made by and between (1) AK Steel Holding
Corporation (“Holding”) and AK Steel Company (the “Corporation,” and
collectively with Holding, the “Company”) and (2) [insert name] (the
“Indemnitee”).
I. RECITALS
A. It
is in the best interests of stockholders and the promotion of good corporate
governance that corporations retain and attract the most capable persons
available to serve as their directors and officers. Corporations’
efforts to retain and attract such persons have been undermined by a substantial
increase in corporate litigation that subjects directors and officers to great
personal financial risks resulting from their service as directors and
officers. Such financial risks may bear no reasonable relationship to
the compensation of such directors and officers and the defense and/or
settlement of the litigation is often beyond the personal resources of directors
and officers.
B. The
Company carries liability insurance to provide financial protection to its
directors and officers from the risks associated with such litigation, but the
liability insurance coverage available to the Company may be inadequate in
certain circumstances to cover all possible exposure for which a director or
officer should be protected. The Company believes that the interests
of the Company and its stockholders would best be served by a combination of
such insurance and the indemnification by the Company of the directors and
officers of the Company. It thus is now, and has always been, the
express policy of the Company to indemnify and advance expenses to its directors
and officers to provide them with the maximum protection permitted by
law.
C. The
Company’s Certificate of Incorporation, as amended and/or restated (the
“Certificate”) provides for the Company to indemnify its directors and officers
to the fullest extent permitted by law. The Certificate expressly
states that the indemnification provisions set forth in such Certificate are not
exclusive, and contemplate that contracts may be entered into between the
Company and its directors and officers with respect to
indemnification;
D. The
Delaware General Company Laws (the “DGCL”), under which the Company is
organized, empowers the Company in Section 145 to indemnify its officers,
directors, employees and agents and persons who serve, at the request of the
Company, as the directors, officers, employees or agents of certain other
entities, and expressly provides that the indemnification provided by Section
145 is not exclusive;
E. Section
102(b)(7) of the DGCL allows a corporation to include in its certificate of
incorporation a provision limiting or eliminating the personal liability of a
director for monetary damages in respect of claims by stockholders and
corporations for breach of certain fiduciary duties, and the Company has so
provided in its Certificate that each director shall be exculpated from such
liability to the maximum extent permitted by law;
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F. The
Board of Directors has determined that contractual indemnification as set forth
in this Agreement is not only reasonable and prudent, but also promotes the best
interests of the Company and its stockholders;
G. The
Company desires and has requested Indemnitee to serve or continue to serve as a
director or officer of the Company free from undue concern for unwarranted
claims for damages arising out of or related to such services to the Company;
and
H. Indemnitee
is willing to serve, continue to serve, or to provide additional service for or
on behalf of the Company on the condition that he or she is furnished the
indemnity provided for in this Agreement.
II. TERMS
OF AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
A. Indemnification
Obligation.
1. To
the fullest extent permitted by law, including the laws of the State of
Delaware, the Company shall indemnify Indemnitee if Indemnitee was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter referred to collectively as
“Indemnified Proceeding”), by reason of the fact that Indemnitee is, was or has
agreed to serve in any of the capacities set forth below, or by reason of any
action alleged to have been taken or not taken in any such
capacity. Such capacities (hereinafter referred to as “Indemnified
Capacities”) are as follows:
a. a
director, officer, employee or agent of Holding and/or the Corporation;
or,
b. a
director, officer, employee or agent of a wholly-owned subsidiary of
Holding and/or the Corporation; or,
c. so
long as the Indemnitee is serving at the request of Holding and/or the
Corporation, a director, officer, employee, agent or other similar capacity
(which, for purposes of this Agreement, shall include a trustee, partner,
manager or similar capacity) of any other corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise in which Holding or
the Corporation has an affiliation or interest;
2. To
the fullest extent permitted by law, the indemnification provided by this
Agreement shall be from and against all expenses, attorneys’ fees, costs,
judgments, fines, penalties, amounts paid in settlement, and other liabilities
which have been actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with any Indemnified Proceeding, and any
appeal therefrom (hereinafter referred to collectively as “Indemnified
Expenses”). For the purpose of avoidance of doubt, the foregoing
indemnification obligation is intended to include, but not be limited to,
claims
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for
monetary damages against Indemnitee in respect of an alleged breach of fiduciary
duty to the fullest extent permitted under Section 102(b)(7) of the
DGCL.
3. The Company
further shall indemnify Indemnitee against any Indemnified Expenses, regardless
of the nature of the proceedings in which the Indemnified Expenses were
incurred, if such Indemnified Expenses would have been covered under the
directors and officers liability insurance policies secured by the Company to
provide coverage to Indemnitee in effect on the effective date of this Agreement
or any other such insurance polices which become effective on any subsequent
date.
4. In
the event of any payment by the Company under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee with respect to any insurance policy. The Indemnitee shall
execute all papers required and take all action necessary to secure such rights,
including execution of such documents as are necessary to enable the Company to
bring suit to enforce such rights in accordance with the terms of such insurance
policy. The Company shall pay or reimburse all expenses actually and reasonably
incurred by Indemnitee in connection with such subrogation.
B. Limitation on
Indemnification. Notwithstanding any other provision in this
Agreement to the contrary, the Company’s obligation to indemnify Indemnitee is
limited as follow:
1. Indemnification
under this Agreement shall only be provided if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe Indemnitee’s conduct was
unlawful.
2. Indemnification
under this Agreement shall be made by the Company only upon a determination that
indemnification of the Indemnitee is proper in the circumstances because the
Indemnitee has met the qualifications required under Section II.A, above, and
the applicable standard of conduct set forth in this Section II.B.
3. The
Company shall not be obligated pursuant to this Agreement to indemnify
Indemnitee:
a. with
respect to what would otherwise be an Indemnified Expense under this Agreement
if, and to the extent that, Indemnitee is entitled to and receives payment with
respect to such Indemnified Expense under any insurance policy, contract, or
other agreement;
b. with
respect to an action, suit or proceeding initiated by Indemnitee, unless such
action, suit or proceeding was authorized or consented to by the Board of
Directors of the Company; provided, however, this Section II.B.3.b shall not
apply to an action, suit or proceeding brought to establish or enforce a right
to indemnification under this Agreement;
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c. for
amounts paid in settlement of any Indemnified Proceeding without the Company’s
prior written consent, which consent shall not be unreasonably
withheld;
d. for
any payment or accounting of profits arising from the purchase or sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute; provided,
however, that nothing in this subsection (d) is intended to or shall be
interpreted to excuse the Company from indemnifying Indemnitee for attorneys’
fees and other reasonable expenses incurred in defending Indemnitee against any
such claim under Section 16(b) if and to the extent the Company would otherwise
have an obligation to do so under this Agreement; or
e. with
respect to Indemnified Expenses incurred by the Indemnitee in connection with an
action, suit or proceeding instituted by the Indemnitee to establish or enforce
a right to indemnification under this Agreement if a court of competent
jurisdiction determines that such action, suit or proceeding was not instituted
in good faith or was frivolous.
4. In
the case of any action or suit by the Company seeking to procure a judgment in
its favor against Indemnitee by reason of the fact that Indemnitee is or was
serving in an Indemnified Capacity, no indemnification shall be made with
respect to any claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company pursuant to a final judgment not subject to
further appeal unless, and only to the extent that, the Delaware Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity with respect to such portion of the Indemnified Expenses which the
Delaware Court of Chancery or such other court shall deem proper.
C. Successful Defense; Partial
Indemnification.
1. For
purposes of this Agreement, if any Indemnified Proceeding is
dismissed or otherwise disposed of without (a) the disposition being adverse to
Indemnitee, (b) an adjudication that Indemnitee was liable to the Company, (c) a
plea of guilty by Indemnitee, (d) an adjudication that Indemnitee did not act in
good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, or (e) with respect to any
criminal action or proceeding, an adjudication that Indemnitee had reasonable
cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be
considered for the purposes of this Agreement to have been wholly successful
with respect to such Indemnified Proceeding. The termination of an Indemnified
Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent shall not, of itself, create a presumption that the
person did not act in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company, or with respect to
any criminal action or
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proceeding,
an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s
conduct was unlawful.
2. To the extent that an
Indemnitee has been successful on the merits or otherwise in defense of any
Indemnified Proceeding, or in defense of a claim, issue or matter in such
Indemnified Proceeding, the Indemnitee shall be indemnified against Indemnified
Expenses actually and reasonably incurred by Indemnitee in connection with such
proceeding. If Indemnitee is entitled under any provision of this
Agreement to indemnification for some or a portion of the expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
any action, suit, proceeding or investigation, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion of such expenses to which Indemnitee is entitled.
D. Advance Payment of Expenses;
Defense of Claim.
1. Indemnified Expenses shall be paid by the Company in advance of the final disposition of the Indemnified Proceeding in connection with which they were incurred within thirty days after receipt by the Company of (i) a statement or statements from Indemnitee requesting such advance or advances, with appropriate and reasonable documentation showing that such Indemnified Expenses have been incurred, and (ii) an undertaking by or on behalf of Indemnitee to repay such amount or amounts if and to the extent that it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company as authorized by this Agreement. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment. Advances shall be unsecured and interest-free.
2. In the event
the Company shall be obligated under this Agreement to indemnify Indemnitee with
respect to Indemnified Expenses, and timely satisfies its obligation to do so,
the Company shall be entitled to assume the defense of the Indemnified
Proceeding in connection with which the Indemnified Expenses were incurred, with
counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of
written notice of its election to do so; provided, however, the Company shall
not settle any Indemnified Proceeding in any manner that would impose any
non-indemnifiable fine or other obligation on Indemnitee without Indemnitee’s
prior written consent, which consent shall not be unreasonably
withheld. After delivery of notice, approval of counsel by
Indemnitee, and the retention of such counsel by the Company, the Company
subsequently will not be liable to Indemnitee under this Agreement for any fees
or expenses incurred by Indemnitee with respect to other counsel in the same
Indemnified Proceeding; provided, however, that (1) Indemnitee shall have the
right to employ Indemnitee’s own counsel in such Indemnified Proceeding at
Indemnitee’s own expense, and (2) if a conflict of interest or position arises,
or is reasonably likely to arise, with respect to any significant issue between
the Company and Indemnitee in the conduct of any such defense, then Indemnitee
shall have the right to employ Indemnitee’s own counsel in such Indemnified
Proceeding at the Company’s expense.
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E. Procedure for
Indemnification; Enforcement of Indemnification Obligation.
1. To
obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request for indemnification promptly following receipt by
Indemnitee of notice of the commencement of any Indemnified Proceeding against
Indemnitee. Indemnitee immediately shall co-operate with the Company
to provide, and to assist the Company to locate, such documentation and
information as is reasonably available and necessary to determine whether and to
what extent Indemnitee is entitled to indemnification. The failure by
Indemnity to timely notify the Company of the commencement of an Indemnified
Proceeding will not relieve the Company from any obligation it otherwise would
have to Indemnitee under this Agreement, except to the extent the Company is
prejudiced in the defense of such Indemnified Proceeding as a result of such
failure.
2. The
Company’s shall determine and respond promptly, and in any event no later than
sixty days following receipt of a request for indemnification under this
Agreement, whether it will grant Indemnitee’s request. Any such
determination shall be made with respect to an Indemnitee who is a Director or
Officer at the time of such determination: (a) by a majority vote of the
directors who are not parties to the Indemnified Proceeding in question
(“Disinterested Directors”), even though less than a quorum, (b) by a committee
of Disinterested Directors designated by majority vote of Disinterested
Directors, even though less than a quorum, (c) if there are no Disinterested
Directors, or if the Disinterested Directors so direct, by independent legal
counsel in a written opinion, (d) by the stockholders, or (e) by a court of
competent jurisdiction.
3. The
Indemnitee shall be presumed to be entitled to indemnification under this
Agreement upon submission of a timely request for indemnification pursuant to
this Section II.E., and the Company shall have the burden of proof in overcoming
that presumption in reaching a determination contrary to that
presumption. Such presumption shall be used as a basis for a
determination of entitlement to indemnification unless the Company overcomes
such presumption by clear and convincing evidence.
4. The
right to indemnification under this Agreement shall be enforceable by Indemnitee
in any court of competent jurisdiction if the Company denies such request, in
whole or in part, or fails to respond within such sixty-day
period. Neither the failure of the Company to have made a
determination prior to the commencement of such action that indemnification of
Indemnitee is proper in the circumstances, nor the fact that there has been an
actual determination by the Company that indemnification of Indemnitee is not
proper, shall be a defense to the action or create a presumption that Indemnitee
is or is not entitled to indemnification. The Indemnitee’s expenses
(including attorneys’ fees) incurred in connection with successfully
establishing Indemnitee’s right to indemnification, in whole or in part, in any
such proceeding or otherwise shall also be indemnified by the
Company.
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F. Change in
Control.
1. If
a Change in Control (as defined below in this Section F) occurs and results in
individuals who were directors prior to the circumstances giving rise to the
Change in Control ceasing, for any reason ceasing to constitute a majority of
the Board of Directors of the Company, the determination set forth above in
Section E whether to provide indemnification shall be made by independent legal
counsel and not by the then-Board of Directors. Under such
circumstances, the independent legal counsel shall be selected jointly by
counsel for the Company and counsel for the Indemnitee (whether Indemnitee is a
director or an officer) whose request for indemnification is to be
determined. If the parties’ counsel cannot agree upon the selection
of independent legal counsel within fourteen calendar days of the request by
Indemnitee for indemnification, the Indemnitee’s counsel may request that the
presiding judge for the United States District Court for the Southern District
of Ohio select such independent counsel and both the Company and Indemnitee
agree to be bound by such selection. The Company agrees to pay the
reasonable fees of the independent legal counsel and fully indemnify such
counsel against any and all expenses (including attorney’s fees), claims,
liabilities and damages arising out of or relating to this Agreement or the
independent legal counsel’s engagement pursuant to this Agreement.
2. A
“Change in Control”
shall be deemed to have occurred if:
(a) any
person (other than a trustee or other fiduciary holding securities under an
employee benefit plan in which employees of the Company participate) becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing forty percent (40%) or more of the combined voting power of the
Company’s then outstanding voting securities; or
(b) during
any period of two (2) consecutive years individuals who at the beginning of such
period constitute the Board, including for this purpose any new Director of the
Company (other than a Director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clauses (i) or
(iii) of this Subsection (g)) whose election by the Board or nomination for
election by the stockholders of the Company was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who either were Directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board; or
(c) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation (other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation) or the stockholders of the
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Company
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company’s
assets.
G. Other Definitions.
For purposes of this Agreement, the following definitions shall
apply:
1. The
term “action, suit or proceeding” shall be broadly and reasonably construed and
shall include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative.
2. The
term “expenses” shall be broadly and reasonably construed and shall include,
without limitation, all direct and indirect costs of any type or nature
whatsoever (including, without limitation, all attorneys’ fees and related
disbursements or expenses, court costs, filing fees, appeal bonds, and other
out-of-pocket costs) in connection with either the investigation, defense or
appeal of a Indemnified Proceeding or a proceeding to establish or enforce a
right to indemnification under this Agreement, Section 145 of the General
Company Law of the State of Delaware, or otherwise.
3. A
person who acted in good faith and in a manner such person reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner “in or not opposed to the
best interests of the Company” as referred to in this Agreement.
H. Other Terms and
Conditions.
1. Severability; Savings
Clause. The provisions of this Agreement are severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of any other provision. If any provision or provisions
of this Agreement shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Indemnitee as to
Indemnified Expenses to the full extent permitted by any applicable portion of
this Agreement that shall not have been invalidated and to the full extent
permitted by applicable law.
2. Form and Delivery of
Communications. Any notice, request or other communication
required or permitted to be given to the parties under this Agreement shall be
in writing and either delivered in person or sent by certified or registered
mail, return receipt requested, to the parties at the following addresses (or at
such other addresses for a party as such party subsequently specifies by like
notice):
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If to the Company:
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If to Indemnitee:
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AK
Steel Corporation
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c/o
General Counsel
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0000
Xxxxxx Xxxxxx Xxxxx
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Xxxx
Xxxxxxx, Xxxx 00000
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3. Nonexclusivity. The
provisions for indemnification and advancement of expenses set forth in this
Agreement shall not be deemed exclusive of any other rights which Indemnitee may
have, including without limitation rights (a) under any provision of law, the
Company’s Certificate of Incorporation or ByLaws, (b) in any court in which a
proceeding is brought, (c) as a result of or pursuant to a vote of the Company’s
stockholders or disinterested directors, or (d) in other agreements, and
Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting
as an agent of the Company and shall inure to the benefit of the heirs,
executors and administrators of Indemnitee. However, no amendment or
alteration of the Company’s Certificate of Incorporation or ByLaws or any other
agreement shall adversely affect the rights provided to Indemnitee under this
Agreement.
4. Interpretation of
Agreement. It is understood that the parties intend this
Agreement to be interpreted and enforced so as to provide indemnification to
Indemnitee to the fullest extent now or hereafter permitted by law.
5. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the matters covered hereby, and any other
prior or contemporaneous oral or written understandings or agreements with
respect to the matters covered hereby are expressly superceded by this
Agreement.
6. Modification and
Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision (whether or not
similar) nor shall such waiver constitute a continuing waiver.
7. Successor and
Assigns. All of the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of, and shall be enforceable
by, the parties to this Agreement and their respective successors, assigns,
heirs, executors, administrators and legal representatives. The Company shall
require and cause any direct or indirect successor (whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company, by written agreement in form and substance reasonably
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.
8. Governing Law; Jurisdiction. This
Agreement shall be governed exclusively by and construed according to the laws
of the State of Delaware, as applied to contracts between Delaware residents and
as if entered into and to be performed entirely within Delaware. If a
court of competent jurisdiction shall make a final determination that the
provisions of the law of any state other than Delaware govern indemnification by
the Company of its officers and directors, then the indemnification provided
under this Agreement shall in all instances be enforceable to the fullest extent
permitted under such law, notwithstanding any provision of this Agreement to the
contrary. The parties to this Agreement consent to the jurisdiction
of any federal or state court of competent jurisdiction in the states of
Delaware and Ohio solely for the
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purpose
of any action brought to resolve a dispute arising under, or to enforce, this
Agreement.
9. No Employment Rights.
Nothing in this Agreement is intended to create in Indemnitee any right to
employment or continued employment with Company.
10. Indemnification Obligation
Survives Termination. It is expressly understood and agreed by
the parties that the obligation of the Company to indemnify Indemnitee survives
the termination of Indemnitee’s service to the Company as a director or officer
with respect to acts or omissions of Indemnitee while a director or officer of
the Company and with respect to claims, issues or matters arising from or in any
way related to Indemnitee’s service as a director or officer of the Company
prior to such termination.
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered to be
effective as of the date first above written.
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AK
STEEL HOLDING CORPORATION
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By
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Name:
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Title:
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AK
STEEL CORPORATION
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By
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Name:
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Title:
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INDEMNITEE:
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By
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Name:
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