DIRECTOR INDEMNIFICATION AGREEMENT
DIRECTOR INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement, dated as of March 24, 2009, is made by and between
Compass Minerals International, Inc., a Delaware corporation (the
"Corporation"), and __________ (the "Indemnitee").
RECITALS
A. The
Corporation recognizes that competent and experienced persons are increasingly
reluctant to serve or to continue to serve as directors of corporations unless
they are protected by comprehensive liability insurance or indemnification, or
both, due to increased exposure to litigation costs and risks resulting from
their service to such corporations, and due to the fact that the exposure
frequently bears no reasonable relationship to the compensation of such
directors;
B. The
statutes and judicial decisions regarding the duties of directors are often
difficult to apply, ambiguous, or conflicting, and therefore fail to provide
such directors with adequate, reliable knowledge of legal risks to which they
are exposed or information regarding the proper course of action to
take;
C. The
Corporation and Indemnitee recognize that plaintiffs often seek damages in such
large amounts and the costs of litigation may be so enormous (whether or not the
case is meritorious), that the defense and/or settlement of such litigation is
often beyond the personal resources of directors and the exposure from such
litigation frequently bears no reasonable relationship to the compensation of
such directors;
D. The
Corporation believes that it is unreasonable for its directors to assume the
risk of huge judgments and other expenses which may occur in cases in which the
director received no personal profit and in cases where the director was not
culpable;
E. The
Corporation, after reasonable investigation, has determined that the liability
insurance coverage presently available to the Corporation may be inadequate in
certain circumstances to cover all possible exposure for which Indemnitee should
be protected. The Corporation believes that the interests of the
Corporation and its stockholders would best be served by a combination of such
insurance and the indemnification by the Corporation of the directors of the
Corporation;
F. The
Corporation's Certificate of Incorporation and ByLaws require the Corporation to
indemnify its directors (along with board elected officers) to the fullest
extent permitted by the Delaware General Corporation Law (the "DGCL"). The
Certificate of Incorporation and ByLaws expressly provide that the
indemnification provisions set forth therein are not exclusive, and contemplate
that contracts may be entered into between the Corporation and its directors
with respect to indemnification;
G. Section
145 of the DGCL ("Section 145"), under which the Corporation is organized,
empowers the Corporation to indemnify its officers, directors, employees
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and
agents by agreement and to indemnify persons who serve, at the request of the
Corporation, as the directors, officers, employees or agents of other
corporations or enterprises, and expressly provides that the indemnification
provided by Section 145 is not exclusive;
H. 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 shareholders and
corporations for breach of certain fiduciary duties, and the Corporation has so
provided in its Certificate of Incorporation that each Director shall be
exculpated from such liability to the maximum extent permitted by
law;
I. The
Corporation desires to provide the Indemnitee with specific contractual
assurances of the Indemnitee's rights to full indemnification against litigation
risks and reasonable expenses (regardless, among other things, of any amendment
to or revocation of the Certificate of Incorporation and ByLaws or any change in
the ownership of the Corporation or the composition of its Board of Directors)
and, to the extent insurance is available, the coverage of the Indemnitee under
the Corporation's directors' and officers' liability insurance
policies;
J. The
Board of Directors has determined that contractual indemnification as set forth
herein is not only reasonable and prudent but also promotes the best interests
of the Corporation and its stockholders;
K. The
Corporation desires and has requested Indemnitee to serve or continue to serve
as a director of the Corporation free from undue concern for unwarranted claims
for damages arising out of or related to such services to the Corporation;
and
L. Indemnitee
is willing to serve, continue to serve or to provide additional service for or
on behalf of the Corporation on the condition that he is furnished the indemnity
provided for herein.
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 hereto, intending to be legally
bound, hereby agree as follows:
Section
1. Certain Definitions.
For purposes of this Agreement, the following definitions shall
apply:
(a) The
term "Proceeding" shall be broadly 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, proceeding, or arbitration, whether
civil, criminal, administrative, investigative, appellate or arbitral, and
whether formal or informal.
(b) The
phrase "by reason of the fact that Indemnitee is or was a director or officer of
the Corporation, or is or was serving at the Corporation's request as a
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director,
officer, employee or agent of any Other Enterprise", or any substantially
similar phrase, shall be broadly construed and shall include, without
limitation, any actual or alleged act or omission to act.
(c) The
term "Expenses" shall be broadly and reasonably construed and shall include,
without limitation, all direct and indirect expenses, costs or charges of any
type or nature whatsoever (including, without limitation, all attorneys' fees
and related disbursements, appeal bonds, other out-of-pocket costs and
reasonable compensation for time spent by Indemnitee for which Indemnitee is not
otherwise compensated by the Corporation or any third party, provided that the
rate of compensation and estimated time involved is approved by the
Corporation's Board of Directors, which approval shall not be unreasonably
withheld, conditioned or delayed), actually and reasonably incurred by
Indemnitee in connection with the investigation, preparation, prosecution,
defense, settlement, arbitration or appeal of, or the giving of testimony in, a
Proceeding or establishing or enforcing a right to indemnification under this
Agreement, the Corporation's Certificate of Incorporation or ByLaws, Section 145
of the General Corporation Law of the State of Delaware or
otherwise.
(d) The
terms "judgments, fines and amounts paid in settlement" shall be broadly
construed and shall include, without limitation, all direct and indirect
payments of any type or nature whatsoever (including, without limitation, all
penalties and amounts required to be forfeited or reimbursed to the
Corporation), as well as any penalties or excise taxes assessed on a person with
respect to an employee benefit plan.
(e) The
term "Corporation" shall include, without limitation and in addition to the
resulting corporation, any constituent corporation or any Other Enterprise
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director or officer of such constituent corporation
or Other Enterprise, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of any Other Enterprise,
shall stand in the same position under the provisions of this Agreement with
respect to the resulting or surviving corporation as he or she would have with
respect to such constituent corporation or Other Enterprise as if its separate
existence had continued.
(f) The
term "Other Enterprise" shall include, without limitation, any other
corporation, partnership, joint venture, trust or employee benefit
plan.
(g) The
phrase "serving at the request of the Corporation", or any substantially similar
phrase, shall include, without limitation, any service as a director or officer
of the Corporation which involves services as a director, officer, employee or
agent with respect to any Other Enterprise, including any employee benefit
plan.
(h) 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 "not opposed to the best
interests of the Corporation" as referred to in this Agreement.
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(i) The
term "defense" shall include investigations of any Proceeding, appeals of any
Proceeding and defensive assertion of any cross-claim or
counterclaim.
(j) The
term "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
Corporation or Indemnitee in any matter material to either such party (other
than with respect to matters concerning Indemnitee under this Agreement, or of
other indemnitees under similar indemnification agreements), or (ii) any
other party to the Proceeding 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 Corporation or Indemnitee in an action to determine
Indemnitee's rights under this Agreement. The Corporation agrees to
pay the reasonable fees of the Independent Counsel arising out of or relating to
this Agreement or its engagement pursuant hereto.
(k) The
term "Change of Control" means (i) an acquisition by any person (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) of beneficial ownership of fifteen percent
(15%) or more of the combined voting power of the Corporation's then outstanding
voting securities; (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors of the
Corporation and any new director whose election by the Board of Directors or
nomination for election by the Corporation's stockholders 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 thereof; or (iii) the consummation of a merger or consolidation
involving the Corporation if the stockholders of the Corporation, immediately
before such merger or consolidation, do not own, immediately following such
merger or consolidation, more than eighty-five percent (85%) of the combined
voting power of the outstanding voting securities of the resulting entity in
substantially the same proportion as their ownership of voting securities
immediately before such merger or consolidation, (iv) the consummation of the
sale or other disposition of all or substantially all of the assets of the
Corporation, (v) approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation or (vi) the occurrence of any
other event of a nature that would be required to be reported in response to
either Item 5.01 of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A (or
a response to any similar item on any similar schedule or form promulgated under
the Exchange Act), whether or not the Corporation is then subject to such
reporting requirement. Notwithstanding the foregoing, a Change of
Control shall not be deemed to occur solely because fifteen percent (15%) or
more of the then outstanding voting securities is acquired by (i) a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained by the Corporation or any of its subsidiaries or (ii) any entity
that, immediately prior to such acquisition, is owned directly or indirectly by
the stockholders of the Corporation in the same proportion as their ownership of
shares in the Corporation immediately prior to such acquisition.
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Section
2. Indemnification.
(a) Subject
to Sections 4, 6 and 8 of this Agreement, to the fullest extent not prohibited
by the laws of the State of Delaware, as the same now exists or may hereafter be
amended (but only to the extent any such amendment permits the Corporation to
provide broader indemnification rights than such law permitted the Corporation
to provide prior to such amendment), the Corporation shall indemnify, defend and
hold harmless, Indemnitee if Indemnitee was or is a party or is threatened to be
made a party to, or a witness of, or is otherwise involved in, any Proceeding by
reason of the fact that Indemnitee is or was or has agreed to serve as a
director or officer of the Corporation, or is or was serving at the
Corporation's request as a director, officer, employee or agent of any Other
Enterprise, or by reason of any action taken or alleged to have been taken, or
omitted to be taken or alleged to be omitted to be taken, in such
capacity.
(b) The
indemnification provided by this Section 2 shall be from and against Expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by Indemnitee or on Indemnitee's behalf in connection with such Proceeding, but
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 Corporation, and, with respect to any criminal Proceeding, had no reasonable
cause to believe Indemnitee's conduct was unlawful.
(c) Notwithstanding
the foregoing provisions of this Section 2, in the case of any Proceeding by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that Indemnitee is or was a director or officer of the Corporation, or
is or was serving at the Corporation's request as a director, officer, employee
or agent of any Other Enterprise, no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Corporation unless, and only to the extent that, the Delaware
Court of Chancery or the court in which such Proceeding 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 for such Expenses which the Delaware Court of Chancery or
such other court shall deem proper.
(d) The
termination of any Proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, 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 Corporation, and, with respect to any criminal Proceeding, had reasonable
cause to believe that Indemnitee's conduct was unlawful.
Section
3. Successful Defense; Partial
Indemnification. To the extent that Indemnitee has been successful on the
merits or otherwise in defense of any Proceeding referred to in Section 2 hereof
or in defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against Expenses actually and reasonably incurred in connection
therewith. For purposes of this Agreement and without
limiting the foregoing, if any Proceeding is disposed of, on the merits or
otherwise (including a disposition without prejudice), without (i) the
disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee
was liable to the Corporation, (iii) a plea of guilty or nolo contendere by
Indemnitee, (iv) an
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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 Corporation, and
(v) with respect to any criminal Proceeding, an adjudication that Indemnitee had
reasonable cause to believe Indemnitee's conduct was unlawful, Indemnitee shall
be considered for the purposes hereof to have been wholly successful with
respect thereto.
If
Indemnitee is entitled under any provision of this Agreement to indemnification
by the Corporation for some or a portion of the Expenses, judgments, fines or
amounts paid in settlement actually and reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with any Proceeding, or in defense of any
claim, issue or matter therein, and any appeal therefrom but not, however, for
the total amount thereof, the Corporation shall nevertheless indemnify
Indemnitee for the portion of such Expenses, judgments, fines or amounts paid in
settlement to which Indemnitee is entitled. Any necessary
determination regarding allocation or apportionment of Expenses between
successful and unsuccessful claims, issues or matters shall be made by the
person, persons or entity empowered or selected under Section 4(a) to determine
whether Indemnitee is entitled to indemnification.
Section
4. Determination That
Indemnification Is Proper.
(a) Any
indemnification hereunder shall (unless otherwise ordered by a court) be made by
the Corporation unless a determination is made that indemnification of such
person is not proper in the circumstances because he or she has not met the
applicable standard of conduct set forth in Section 2(b) hereof. Any such
determination shall be made (i) by a majority vote of the directors who are not
parties to the Proceeding in question ("disinterested directors"), even if less
than a quorum, (ii) by a majority vote of a committee of disinterested directors
designated by majority vote of disinterested directors, even if less than a
quorum, (iii) by a majority vote of a quorum of the outstanding shares of stock
of all classes entitled to vote on the matter, voting as a single class, which
quorum shall consist of stockholders who are not at that time parties to the
Proceeding in question, (iv) by Independent Counsel, or (v) by a court of
competent jurisdiction; provided, however, that following a
Change of Control of the Corporation, any determinations, whether arising out of
acts, omissions or events occurring prior to or after the Change of Control of
the Corporation, shall be made by Independent Counsel selected in the manner
described in Section 4(b). Such Independent Counsel shall determine
as promptly as practicable whether and to what extent Indemnitee would be
permitted to be indemnified under applicable law and shall render a written
opinion to the Corporation and to Indemnitee to such effect.
(b) If
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 4(a) hereof, the Independent Counsel shall be
selected as provided in this Section 4(b). The Independent Counsel
shall be selected by the Board of Directors. Indemnitee may, within
ten (10) days after such written notice of selection shall have been given,
deliver to the Corporation, as the case may be, 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 meet the requirements
of "Independent Counsel" as defined in Section 1 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so
selected shall act as Independent Counsel. If a written objection is
made
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in proper
form, the Independent Counsel 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. If, within twenty (20) days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 6(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Corporation or Indemnitee may petition the Court of
Chancery of the State of Delaware or other court of competent jurisdiction for
resolution of any objection which shall have been made by the Indemnitee to the
Corporation's selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the court or by such other person as
the court shall designate, and the person with respect to whom all objections
are so resolved or the person so appointed shall act as Independent Counsel
under Section 4(a) hereof. The Corporation shall pay any and all
reasonable fees and expenses of Independent Counsel incurred by such Independent
Counsel in connection with acting pursuant to Section 4(a) hereof, and the
Corporation shall pay all reasonable fees and expenses incident to the
procedures of this Section 4(b) regardless of the manner in which such
Independent Counsel was selected or appointed.
Section
5. Advance Payment of Expenses;
Notification and Defense of Claim.
(a) Expenses
incurred by Indemnitee in defending a Proceeding, or in connection with an
enforcement action pursuant to Section 6(b), shall be paid by the
Corporation to Indemnitee in advance of the final disposition of such Proceeding
as soon as practicable but in any event no later than twenty (20) days after
receipt by the Corporation of (i) a statement or statements from Indemnitee
requesting such advance or advances from time to time, and (ii) an undertaking
by or on behalf of Indemnitee to repay such amount or amounts, only if, and to
the extent that, there is a final judicial determination (as to which all rights
of appeal therefrom have been exhausted or lapsed) that Indemnitee is not
entitled to be indemnified by the Corporation as authorized by this Agreement or
otherwise. Such undertaking shall be accepted without reference to
the financial ability of Indemnitee to make such repayment. Advances shall be
unsecured and interest-free.
(b) Promptly
after receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee shall, if a claim thereof is to be made against the Corporation
hereunder, notify the Corporation of the commencement thereof. The
failure to promptly notify the Corporation of the commencement of the
Proceeding, or Indemnitee's request for indemnification, will not relieve the
Corporation from any liability that it may have to Indemnitee hereunder, except
to the extent the Corporation is prejudiced in its defense of such Proceeding as
a result of such failure.
(c) In
the event the Corporation shall be obligated to pay the Expenses of Indemnitee
with respect to a Proceeding as provided in this Agreement, its Certificate of
Incorporation, its Bylaws or otherwise, the Corporation, if appropriate, shall
be entitled to assume the defense of such Proceeding, with counsel reasonably
acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of
its election to do so. After delivery of such notice, approval of
such counsel by Indemnitee and the retention of such counsel by the Corporation,
the Corporation will not be liable to Indemnitee under this Agreement for any
fees of counsel subsequently incurred by Indemnitee with respect to the same
Proceeding, provided that (i) Indemnitee shall have the right to employ
Indemnitee's own counsel in such Proceeding at Indemnitee's expense and (ii) if
(1) the employment of counsel
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by
Indemnitee has been previously authorized in writing by the Corporation, (2)
counsel to the Corporation or Indemnitee shall have reasonably concluded that
there may be a conflict of interest or position, or reasonably believes that a
conflict is likely to arise, on any significant issue between the Corporation
and Indemnitee in the conduct of any such defense, (3) after a Change of
Control, the employment of counsel by Indemnitee has been approved by the
Independent Counsel or (4) the Corporation shall not, in fact, have employed
counsel to assume the defense of such Proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Corporation, except as
otherwise provided by this Agreement. The Corporation shall not be
entitled, without the consent of Indemnitee, to assume the defense of any claim
brought by or in the right of the Corporation or as to which counsel for the
Corporation or Indemnitee shall have reasonably made the conclusion provided for
in clause (2) of the proviso in the immediately preceding sentence.
(d) Notwithstanding
any other provision of this Agreement to the contrary, to the extent that
Indemnitee is, by reason of Indemnitee's corporate status with respect to the
Corporation or any Other Enterprise which Indemnitee is or was serving or has
agreed to serve at the request of the Corporation, a witness or otherwise
participates in any Proceeding at a time when Indemnitee is not a party in the
Proceeding, the Corporation shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.
Section
6. Procedure for
Indemnification.
(a) To
obtain indemnification (other than as provided otherwise herein) under this
Agreement, Indemnitee shall promptly submit to the Corporation a written
request, including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to
indemnification. The Corporation shall, promptly upon receipt of such
a request for indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
(b) The
determination whether to grant Indemnitee's indemnification request (whether
made by the Board of Directors or one of its committees, Independent Counsel, or
the Corporation's stockholders) shall be made promptly, and in any event within
sixty (60) days following receipt of a request for indemnification pursuant to
Section 6(a). The right to indemnification as granted by Section 2 of this
Agreement shall be enforceable by Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or
fails to respond within such sixty-day (60) period. It shall be a
defense to any such action (other than an action brought to enforce a claim for
the advance of Expenses under Section 5 hereof where the required undertaking,
if any, has been received by the Corporation) that Indemnitee has not met the
standard of conduct set forth in Section 2 hereof, but the burden of proving
such defense by clear and convincing evidence shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors or one
of its committees, its Independent Counsel, and its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct set forth in Section 2 hereof, nor the fact that
there has been an actual determination by the Corporation (including its Board
of Directors or one of its committees, its Independent Counsel, and its
stockholders) that Indemnitee has not met such applicable standard of conduct,
8
shall be
a defense to the action or create a presumption that Indemnitee has or has not
met the applicable standard of conduct. The Indemnitee's Expenses
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 Corporation.
(c) The
Indemnitee shall be presumed to be entitled to indemnification under this
Agreement upon submission of a request for indemnification pursuant to this
Section 6, and the Corporation 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 Corporation overcomes
such presumption by clear and convincing evidence.
(d) The
knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Corporation shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.
Section
7. Insurance and
Subrogation.
(a) The
Corporation represents that it currently has in effect policy or policies of
director and officer liability insurance (the "Insurance Policies") which names
or covers Indemnitee as an insured.
(b) So
long as Indemnitee shall continue to serve as a director or officer of the
Corporation, or shall continue at the request of the Corporation to serve as a
director or officer, employee or agent of any Other Enterprise, and thereafter
so long as Indemnitee shall be subject to any possible claim or is a party or is
threatened to be made a party to any Proceeding, by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, or is or was
serving in any of said other capacities at the request of the Corporation, the
Corporation shall be required to maintain the Insurance Policies in effect or to
obtain policies of directors' and officers' liability insurance from established
and reputable insurers with coverage in at least the amount or amounts as
prescribed by the Insurance Policies and which provides the Indemnitee with
substantially the same rights and benefits as the Insurance Policies, and which
coverage, rights and benefits shall, in any event, be as favorable to Indemnitee
as are accorded to the most favorably insured of the Corporation's directors or
officers, as the case may be ("Comparable D&O Insurance") unless, in the
reasonable business judgment of the Board of Directors of the Corporation as it
may exist from time to time, either (i) the premium cost for such Insurance
Policies or Comparable D&O Insurance is disproportionate to the amount of
coverage provided, or (ii) the coverage provided by such Insurance Policies
or Comparable D&O Insurance is so limited by exclusions that there is
insufficient benefit provided by such director and officer liability insurance;
provided, however, that in the event that the Board of Directors makes such a
determination, the Corporation shall provide notice to Indemnitee no less than
thirty (30) days prior to the lapse or termination of coverage under the
Insurance Policies or Comparable D&O Insurance.
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(c) If,
at the time of the receipt of a notice of a claim pursuant to the terms hereof,
the Corporation has director and officer liability insurance in effect, the
Corporation shall give prompt notice of the commencement of such claim, and any
Proceeding in which such claim is asserted, to the insurers in accordance with
the procedures set forth in the respective policies. The Corporation
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all amounts payable as a result of such
claim or Proceeding in accordance with the terms of such
policies. The failure or refusal of any such insurer to pay any such
amount shall not affect or impair the obligations of the Corporation under this
Agreement.
(d) In
the event of any payment by the Corporation under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee with respect to any insurance policy, who 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 Corporation
to bring suit to enforce such rights in accordance with the terms of such
insurance policy. The Corporation shall pay or reimburse all Expenses
actually and reasonably incurred by Indemnitee in connection with such
subrogation.
(e) The
Corporation shall not be liable under this Agreement to make any payment of
amounts otherwise indemnifiable hereunder (including, but not limited to,
Expenses, judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement) if and to the extent that Indemnitee has otherwise actually received
such payment under the Corporation's Certificate of Incorporation or ByLaws, or
any insurance policy, contract, agreement or otherwise.
(f) The
Corporation's obligation to indemnify or advance Expenses hereunder to
Indemnitee who is or was serving at the request of the Corporation as a
director, officer, employee or agent of any Other Enterprise shall be reduced by
any amount Indemnitee has actually received as indemnification or advancement of
Expenses from such Other Enterprise.
Section
8. Limitation on
Indemnification. Notwithstanding any other provision herein to
the contrary, the Corporation shall not be obligated pursuant to this
Agreement:
(a) Claims Initiated by
Indemnitee. To indemnify or advance expenses to Indemnitee with respect
to a Proceeding (or part thereof) initiated by Indemnitee, except with respect
to a Proceeding brought to establish or enforce a right to indemnification
(which shall be governed by the provisions of Sections 6(b) and 8(b) of this
Agreement), unless such Proceeding (or part thereof) was authorized or consented
to by the Board of Directors of the Corporation or the Proceeding was commenced
following a Change of Control.
(b) Action for
Indemnification. To indemnify Indemnitee for any Expenses incurred by
Indemnitee with respect to any Proceeding instituted by Indemnitee to enforce or
interpret this Agreement, unless Indemnitee is successful in establishing
Indemnitee's right to indemnification in such Proceeding, in whole or in part,
or unless and to the extent that the court in such Proceeding shall determine
that, despite Indemnitee's failure to establish his or her right to
indemnification, Indemnitee is entitled to indemnity for such
10
Expenses;
provided, however, that nothing in this Section 8(b) is intended to limit the
Corporation's obligation with respect to the advancement of Expenses to
Indemnitee in connection with any such Proceeding instituted by Indemnitee to
enforce or interpret this Agreement, as provided in Section 5
hereof.
(c) Certain Statutory
Violations. To indemnify Indemnitee on account of any Proceeding with
respect to which final judgment is rendered against Indemnitee for (i) payment
or an accounting of profits arising from the purchase or sale by Indemnitee of
securities in violation of Section 16(b) of the Exchange Act or any similar
successor statute, or (ii) any reimbursement of the Corporation by the
Indemnitee of any bonus or other incentive-based or equity-based compensation or
of any profits realized by the Indemnitee from the sale of securities of the
Corporation, as required in each case under the Exchange Act (including any such
reimbursements that arise from an accounting restatement of the Corporation
pursuant to Section 304 of the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx
Act"), or the payment to the Corporation of profits arising from the purchase
and sale by Indemnitee of securities in violation of Section 306 of the
Xxxxxxxx-Xxxxx Act).
(d) Non-compete and
Non-disclosure. To indemnify Indemnitee in connection with
Proceedings or claims involving the enforcement of non-compete and/or
non-disclosure agreements or the non-compete and/or non-disclosure provisions of
employment, consulting or similar agreements the Indemnitee may be a party to
with the Corporation, or any subsidiary of the Corporation or any Other
Enterprise.
Section
9. Mutual
Acknowledgement. Both the Corporation and the Indemnitee
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Corporation from indemnifying its directors, officers,
employees, agents or fiduciaries under this Agreement or
otherwise. The Indemnitee understands and acknowledges that the
Corporation has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Corporation’s
right under public policy to indemnify the Indemnitee.
Section
10. Certain Settlement
Provisions. The Corporation shall have no obligation to
indemnify Indemnitee under this Agreement for amounts paid in settlement of any
Proceeding without the Corporation's prior written consent, which shall not be
unreasonably withheld, conditioned or delayed; provided, however, that if a Change of
Control has occurred, the Corporation shall be liable for indemnification of
Indemnitee for amounts paid in settlement if the Independent Counsel has
approved the settlement. The Corporation shall not settle any
Proceeding in any manner that would impose any fine or other obligation on
Indemnitee without Indemnitee's prior written consent, which shall not be
unreasonably withheld, conditioned or delayed.
Section
11. Savings Clause. If
any provision or provisions of this Agreement shall be invalidated on any ground
by any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify Indemnitee as to Expenses, judgments, fines and amounts paid in
settlement with respect to any Proceeding, including an action by or in the
right of the Corporation, 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.
11
Section
12. Contribution. In
order to provide for just and equitable contribution in circumstances in which
the indemnification provided for herein is held by a court of competent
jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed
that, in such event, the Corporation shall, to the fullest extent permitted by
law, contribute to the payment of Indemnitee's Expenses, judgments, fines and
amounts paid in settlement with respect to any Proceeding, or any claims, issues
or matters in such Proceeding, in an amount that is just and equitable in the
circumstances, taking into account, among other things, contributions by other
directors and officers of the Corporation or others pursuant to indemnification
agreements or otherwise; provided, that, without limiting the generality of the
foregoing, such contribution shall not be required where such holding by the
court is due to (i) the failure of Indemnitee to meet the standard of conduct
set forth in Section 2 hereof, or (ii) any limitation on indemnification set
forth in Section 7(e), 8, 9 or 10 hereof.
Section
13. Form and Delivery of
Communications. All notices and other communications given or
made pursuant to this Agreement shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by facsimile if sent during normal business hours
of the recipient, and if not so confirmed, then on the next business day,
(iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications
shall be sent to the address or facsimile number set forth below, or to such
other address or facsimile number as may have been furnished hereafter to
Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case
may be.
If to the
Corporation:
Compass Minerals International,
Inc.
0000 Xxxx 000xx Xxxxxx,
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Chief Executive
Officer
Facsimile: (000)
000-0000
If to Indemnitee:
_________________________
_________________________
_________________________
Facsimile: ________________
Section
14. Subsequent
Legislation. If the General Corporation Law of Delaware is amended after
adoption of this Agreement to expand further the indemnification of, or
advancement of Expenses to, or making permitted contribution to, directors or
officers, then the Corporation shall indemnify and advance Expenses and make
contributions to Indemnitee to the fullest extent permitted by the General
Corporation Law of Delaware, as so amended.
Section
15. Nonexclusivity. The
provisions for indemnification, advancement of Expenses and contribution set
forth in this Agreement shall not be deemed
12
exclusive
of any other rights which Indemnitee may have under any provision of law, the
Corporation's Certificate of Incorporation or ByLaws, in any court in which a
Proceeding is brought, the vote of the Corporation's stockholders or
disinterested directors, other agreements or otherwise, and Indemnitee's rights
hereunder shall continue after Indemnitee has ceased acting as a director or
officer of the Corporation, or ceased serving at the Corporation's request as a
director, officer, employee or agent of any Other Enterprise, and shall inure to
the benefit of the heirs, executors, administrators and legal representatives of
Indemnitee. However, no amendment or alteration of the Corporation's
Certificate of Incorporation or ByLaws or any other agreement shall adversely
affect the rights provided to Indemnitee under this Agreement.
Section
16. Enforcement. The
Corporation shall be precluded from asserting in any judicial Proceeding that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable. The Corporation agrees that its obligations set forth in
this Agreement are unique and special, and that failure of the Corporation to
comply with the provisions of this Agreement will cause irreparable and
irremediable injury to Indemnitee, for which a remedy at law will be
inadequate. As a result, in addition to any other right or remedy
Indemnitee may have at law or in equity with respect to breach of this
Agreement, Indemnitee shall be entitled to injunctive or mandatory relief
directing specific performance by the Corporation of its obligations under this
Agreement.
Section
17. Interpretation of
Agreement. It is understood that the parties hereto intend
this Agreement to be interpreted and enforced so as to provide indemnification
of, and advancement of Expenses and contribution to, Indemnitee to the fullest
extent now or hereafter permitted by law.
Section
18. Entire
Agreement. This Agreement and the documents expressly referred
to herein constitute the entire agreement between the parties hereto 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 superseded by this Agreement.
Section
19. 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 hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
Section
20. 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 hereto and their respective successors, assigns, heirs, executors,
administrators and legal representatives. The Corporation 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 Corporation, 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 Corporation would
be required to perform if no such succession had taken place. This
Agreement shall continue in effect regardless of whether Indemnitee continues to
serve as a director, officer, employee, agent of fiduciary (as applicable) of
the Corporation or of any Other Enterprise.
13
Section
21. Service of Process and
Venue. For purposes of any Proceedings to enforce this
Agreement, the Corporation and Indemnitee hereby irrevocably and unconditionally
(i) agree that any Proceeding arising out of or in connection with this
Agreement shall be brought only in the Chancery Court of the State of Delaware
(the "Delaware Court"), and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any
Proceeding arising out of or in connection with this Agreement,
(iii) irrevocably appoint, to the extent such party is not otherwise
subject to service of process in the State of Delaware, CT Corporation as its
agent in the State of Delaware as such party's agent for acceptance of legal
process in connection with any such Proceeding against such party with the same
legal force and validity as if served upon such party personally within the
State of Delaware, (iv) waive any objection to the laying of venue of any
such Proceeding in the Delaware Court, and (v) waive, and agree not to
plead or to make, any claim that any such Proceeding brought in the Delaware
Court has been brought in an improper or inconvenient forum.
Section
22. Governing
Law. 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 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 of, or advancement of Expenses or contribution
to, its officers and directors by the Corporation, then the indemnification,
advancement of Expenses and contribution 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.
Section
23. Employment Rights.
Nothing in this Agreement is intended to create in Indemnitee any right to
employment or continued employment.
Section
24. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and all of which together shall be deemed to be one and
the same instrument, notwithstanding that both parties are not signatories to
the original or same counterpart.
Section
25. Headings. The section
and subsection headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
Section
26. Section 409A. It is
intended that any indemnification payment or advancement of Expenses made
hereunder shall be exempt from Section 409A of the Internal Revenue Code of
1986, as amended, and the guidance issued thereunder ("Section 409A") pursuant
to Treasury Regulation Section 1.409A-1(b)(10). Notwithstanding the
foregoing, if any indemnification payment or advancement of Expenses made
hereunder shall be determined to be "nonqualified deferred compensation" within
the meaning of Section 409A, then (i) the amount of the indemnification payment
or advancement of Expenses during one taxable year shall not affect the amount
of the indemnification payments or
14
advancement
of Expenses during any other taxable year, (ii) the indemnification payments or
advancement of Expenses must be made on or before the last day of the
Indemnitee's taxable year following the year in which the expense was incurred,
and (iii) the right to indemnification payments or advancement of Expenses
hereunder is not subject to liquidation or exchange for another
benefit.
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
parties hereto to be effective as of the date first above written.
COMPASS MINERALS INTERNATIONAL,
INC.
By
_______________________________________
Name: Xxxxxx X.
Xxxxxxxxxxxxx
Title: President
and Chief Executive Officer
INDEMNITEE:
By
_______________________________________
Name:
15
