EXHIBIT 10.14
FORM OF
RPM INTERNATIONAL INC.
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of the 15th day of October, 2002, by
and between RPM International Inc., a Delaware corporation (the "Corporation"),
and ________________ (Indemnitee"), an Officer of the Corporation.
WHEREAS, it is essential to the Corporation to retain and
attract as Directors and/or Officers the most capable persons available, such as
Indemnitee; and
WHEREAS, the prevalence of corporate litigation subjects
directors and officers to expensive litigation risks and it is the policy of the
Corporation to indemnify its Directors and/or Officers so as to provide them
with the maximum possible protection permitted by law; and
WHEREAS, in addition, because the statutory indemnification
provisions of the Delaware General Corporation Law (the "DGCL") expressly
provide that they are non-exclusive, it is the policy of the Corporation to
indemnify directors and officers of the Corporation who have, on behalf of the
Corporation, entered into settlements of derivative suits provided they have not
breached the applicable statutory standard of conduct; and
WHEREAS, Indemnitee does not regard the protection available
under the Corporation's Amended and Restated By-laws (the "By-laws") and
insurance, if any, as adequate in the present circumstances, and considers it
necessary and desirable to his or her service as a Director and/or Officer to
have adequate protection, and the Corporation desires to provide such protection
to induce Indemnitee to serve in such capacity;
WHEREAS, the Corporation became a publicly traded corporation
and the parent company of RPM, Inc., an Ohio corporation ("RPM"), and of RPM's
direct and indirect subsidiaries existing immediately prior to the Effective
Time (as hereinafter defined), pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of August 29, 2002, by and among the Corporation,
RPM, and RPM Merger Company (the "Merger Subsidiary"), an Ohio corporation and a
wholly-owned subsidiary of the Corporation;
WHEREAS, under the Merger Agreement, at 9:00 a.m. on October
15, 2002, the effective time of the Certificate of Merger filed with the
Secretary of State of the State of Ohio (the "Effective Time"), (i) the Merger
Subsidiary merged with and into RPM and RPM became a wholly-owned subsidiary of
the Corporation and (ii) each outstanding common share, without par value, of
RPM issued and outstanding immediately prior to the Effective Time was converted
into the right to receive one share of the Corporation's common stock, par value
$.01 per share (the transactions described in this paragraph will collectively
be referred to hereinafter as the "Reincorporation");
WHEREAS, from July 29, 2002 (the date of the incorporation of
the Corporation), until the Effective Time (the "Pre-Reincorporation Period"),
the members of the Corporation's Board of Directors were serving in such
capacity at the request of the Board of Directors of RPM and the Corporation
desires to protect Indemnitee for any and all service on (i) the Board of
Directors of the Corporation during and after the Pre-Reincorporation Period and
(ii) the Board of Directors of RPM at any time prior to the Reincorporation; and
WHEREAS, the DGCL provides that indemnification of directors
and officers of a corporation may be authorized by agreement, and thereby
contemplates that contracts of this nature may be entered into between the
Corporation and Indemnitee;
NOW, THEREFORE, for good and valuable consideration, the
adequacy of which is hereby acknowledged, the Corporation and Indemnitee do
hereby agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue
to serve as a Director and/or Officer of the Corporation for so long as he or
she is duly elected or appointed or until such time as he or she tenders his or
her resignation in writing or is otherwise terminated or properly removed from
office.
The Corporation expressly confirms and agrees that (i) it has
entered into this agreement and assumed the obligations imposed on the
Corporation hereby in order to induce Indemnitee to continue to serve as a
Director and/or Officer of the Corporation and (ii) the obligations imposed on
the Corporation hereby cover service by the Indemnitee (A) during and after the
Pre-Reincorporation Period with respect to the Indemnitee's service on the Board
of Directors of the Corporation and (B) during the period prior to the
Reincorporation with respect to the Indemnitee's service on the Board of
Directors of RPM; and the Corporation acknowledges that Indemnitee is relying
upon this agreement in continuing in his or her capacity as a Director and/or
Officer of the Corporation. The Corporation's obligations under this Agreement
are in addition to any protection Indemnitee may be entitled to pursuant to any
Indemnification Agreement between Indemnitee and RPM.
2. Definitions. As used in this Agreement:
(a) The term "Proceeding" shall include any
threatened, pending, or completed action, suit, arbitration or
proceeding, whether brought by or in the right of the Corporation or
otherwise and whether of a civil, criminal, administrative or
investigative nature, in which Indemnitee may be or may have been
involved as a party or otherwise, by reason of the fact that Indemnitee
is or was a Director and/or Officer of the Corporation, any subsidiary
of the Corporation, or RPM (in connection with any service by
Indemnitee on the Board of Directors of RPM prior to the
Reincorporation), by reason of any action taken by Indemnitee or of any
inaction on his or her part while acting as such a Director and/or
Officer, or by reason of the fact that he or she is or was serving at
the request of the Corporation or RPM (in connection with any service
by Indemnitee on the Board of
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Directors of RPM prior to the Reincorporation) as a director, officer,
member or manager, partner, trustee, employee, agent, or fiduciary of
another corporation, domestic or foreign, nonprofit or for profit, a
limited liability company or a partnership, joint venture, trust or
other enterprise; in each case whether or not he or she is acting or
serving in any such capacity at the time any liability or expense is
incurred for which indemnification or reimbursement can be provided
under this Agreement.
(b) The term "Expenses" shall include, without
limitation, expenses of investigations, judicial or administrative
proceedings or appeals, attorneys' fees and disbursements and any
expenses of establishing a right to indemnification under Paragraph 8
of this Agreement, but shall not include the amount of judgments, fines
or penalties against or settlements paid by Indemnitee.
(c) References to "other enterprise" shall include,
without limitation, employee benefit plans; references to "fines" shall
include, without limitation, any excise tax assessed with respect to
any employee benefit plan; references to "serving at the request of the
Corporation" shall include, without limitation, any service as a
Director and/or Officer of the Corporation which imposes duties on, or
involves services by, such Director and/or Officer with respect to an
employee benefit plan, its participants or beneficiaries; and a person
who acted in good faith and in a manner he or she reasonably believed
to be in the best interests 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.
3. Indemnity in Third-Party Proceedings. The Corporation shall
indemnify Indemnitee in accordance with the provisions of this Paragraph 3 if
Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any Proceeding (other than a 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 and/or Officer of the Corporation or a
subsidiary of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, member or manager, partner, trustee,
employee, agent, or fiduciary of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company or a partnership, joint
venture, trust or other enterprise, against all Expenses, judgments,
settlements, fines and penalties, actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of such Proceeding, but only if
Indemnitee acted in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the Corporation and,
in the case of a criminal proceeding, had no reasonable cause to believe that
his or her conduct was unlawful. The termination of any such Proceeding by
judgment, order of court, 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 he or she reasonably
believed to be in or not opposed to the best interests of the Corporation, and
with respect to any criminal proceeding, that such person had reasonable cause
to believe that his or her conduct was unlawful.
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4. Indemnity for Expenses in Proceedings by or in the Right of
the Corporation. The Corporation shall indemnify Indemnitee in accordance with
the provisions of this Paragraph 4 if Indemnitee is a party to or threatened to
be made a party to 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 and/or Officer of the Corporation or a subsidiary of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
member or manager, partner, trustee, employee, agent, or fiduciary of another
corporation, domestic or foreign, nonprofit or for profit, a limited liability
company or a partnership, joint venture, trust or other enterprise, against all
Expenses actually and reasonably incurred by Indemnitee in connection with the
defense of such Proceeding, but only if he or she acted in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, except that no indemnification for Expenses shall
be made under this Paragraph 4 in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged by court order or judgment to be
liable to the Corporation, unless and only to the extent that any court in which
such Proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses as
such court shall deem proper.
5. Indemnity for Amounts Paid in Settlement in Proceedings by
or in the Right of the Corporation. The Corporation shall indemnify Indemnitee
in accordance with the provisions of this Paragraph 5 if Indemnitee is a party
to or threatened to be made a party to 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 and/or Officer of the Corporation or a
subsidiary of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, member or manager, partner, trustee,
employee, agent, or fiduciary of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company or a partnership, joint
venture, trust or other enterprise, against all amounts actually and reasonably
paid in settlement by Indemnitee in connection with any such Proceeding, but
only if he or she acted in good faith and in a manner which he or she reasonably
believed to be in or not opposed to the best interests of the Corporation.
6. Indemnification of Expenses of Successful Party.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
7. Advances of Expenses. Any Expenses incurred by or on behalf
of Indemnitee pursuant to Paragraphs 3 or 4 in any Proceeding shall be paid by
the Corporation in advance upon the written request of Indemnitee if Indemnitee
shall undertake to (a) repay such amount to the extent that it is ultimately
determined that Indemnitee is not entitled to indemnification hereunder, and (b)
reasonably cooperate with the Corporation concerning the action, suit or
proceeding giving rise to the Expenses. Any advances to be made under this
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Paragraph 7 shall be paid by the Corporation to Indemnitee within 30 days
following delivery of a written request therefor by Indemnitee to the
Corporation.
8. Procedure. Any indemnification and advances provided for in
Xxxxxxxxx 0, 0, 0 xxx 0 xxxxx xx made no later than 30 days after receipt of the
written request of Indemnitee. If a claim under this Agreement, under any
statute, or under any provision of the Corporation's Amended and Restated
Certificate of Incorporation (the "Certificate") or Amended and Restated By-laws
(the "By-laws") providing for indemnification, is not paid in full by the
Corporation within 30 days after a written request for payment thereof has first
been received by the Corporation, Indemnitee may, but need not, at any time
thereafter bring an action against the Corporation to recover the unpaid amount
of the claim and, subject to the other provisions of this Agreement, Indemnitee
shall also be entitled to be paid for the Expenses of bringing such action. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in connection with any action, suit or proceeding in
advance of its final disposition) that Indemnitee has not met the standards of
conduct which make it permissible under applicable law for the Corporation to
indemnify Indemnitee for the amount claimed, but the burden of proving such
defense shall be on the Corporation and Indemnitee shall be entitled to receive
advance payments of expenses pursuant to Paragraph 7 hereof unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists. It is the parties' intention that if the
Corporation contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be for the court or arbitrator, as
applicable, to decide, and neither the failure of the Corporation (including its
Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel or its stockholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct required by applicable law, nor an
actual determination by the Corporation (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.
9. Allowance for Compliance with SEC Requirements. Indemnitee
acknowledges that the Securities and Exchange Commission ("SEC") has expressed
the opinion that indemnification of directors and officers from liabilities
under the Securities Act of 1933 ("Act"), as amended, is against public policy
as expressed in the Act and, is therefore, unenforceable. Indemnitee hereby
agrees that it will not be a breach of this Agreement for the Corporation to
undertake with the SEC in connection with the registration for sale of any stock
or other securities of the Corporation from time to time that, in the event a
claim for indemnification against such liabilities (other than the payment by
the Corporation of expenses incurred or paid by a director or officer of the
Corporation in the successful defense of any action, suit or proceeding) is
asserted in connection with such stock or other securities being registered, the
Corporation will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of competent jurisdiction on
the question of whether or not such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such
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issue. Indemnitee further agrees that such submission to a court of competent
jurisdiction shall not be a breach of this Agreement.
10. Indemnification Hereunder Not Exclusive. The
indemnification provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may be entitled under the Certificate or the
By-laws of the Corporation, any agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of the State of Delaware,
or otherwise, both as to action in his or her official capacity and as to action
in another capacity while holding such office.
The indemnification under this Agreement for any action taken
or not taken while serving in an indemnified capacity shall continue as to
Indemnitee even though he or she may have ceased to be a Director and/or Officer
and shall inure to the benefit of the heirs, executors and personal
representatives of Indemnitee.
11. Partial Indemnification. If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Corporation for some
claims, issues or matters, but not as to other claims, issues or matters, or for
some or a portion of the Expenses, judgments, fines or penalties actually and
reasonably incurred by Indemnitee or amounts actually and reasonably paid in
settlement by Indemnitee in the investigation, defense, appeal or settlement of
any Proceeding, but not for the total amount thereof, the Corporation shall
nevertheless indemnify Indemnitee for the portion of such claims, issues or
matters or Expenses, judgments, fines, penalties or amounts paid in settlement
to which Indemnitee is entitled.
12. No Rights of Continued Employment. Nothing contained in
this Agreement is intended to create in Indemnitee any right to continued
employment.
13. Reimbursement to Corporation by Indemnitee; Limitation on
Amounts Paid by Corporation. To the extent Indemnitee has been indemnified by
the Corporation hereunder and later receives payments from any insurance carrier
covering the same Expenses, judgments, fines, penalties or amounts paid in
settlement so indemnified by the Corporation hereunder, Indemnitee shall
immediately reimburse the Corporation hereunder for all such amounts received
from the insurer.
Notwithstanding anything contained herein to the contrary,
Indemnitee shall not be entitled to recover amounts under this Agreement which,
when added to the amount of indemnification payments made to, or on behalf of,
Indemnitee, under the Certificate or By-laws of the Corporation, in the
aggregate exceed the Expenses, judgments, fines, penalties and amounts paid in
settlement actually and reasonably incurred by Indemnitee ("Excess Amounts"). To
the extent the Corporation has paid Excess Amounts to Indemnitee, Indemnitee
shall be obligated to reimburse the Corporation for such Excess Amounts.
Notwithstanding anything contained herein to the contrary, the
Corporation shall
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not be obligated under the terms of this Agreement, to indemnify Indemnitee:
(a) or advance expenses to Indemnitee with respect to
proceedings or claims initiated or brought voluntarily by Indemnitee and not by
way of defense, except with respect to Proceedings brought to establish or
enforce a right to indemnification under this Agreement or any other statute or
law or otherwise as required under Section 145 of the DGCL, but such
indemnification or advancement of expenses may be provided by the Corporation in
specific cases if the Board of Directors finds it appropriate;
(b) if it is proved by final judgment in a court of law or
other final adjudication to have been based upon or attributable to the
Indemnitee's in fact having gained any personal profit or advantage to which he
or she was not legally entitled;
(c) for any expenses incurred by Indemnitee with respect to
any proceeding instituted by Indemnitee to enforce or interpret this Agreement,
if a court of competent jurisdiction determines that each of the material
assertions made by Indemnitee in such proceeding was not made in good faith or
was frivolous;
(d) for a disgorgement of profits made from the purchase and
sale by the Indemnitee of securities pursuant to Section 16(b) of the Securities
Exchange Act of 1934, as amended, or similar provisions of any state statutory
law or common law; or
(e) for any judgment, fine or penalty which the Corporation is
prohibited by applicable law from paying as indemnity or for any other reason.
14. Scope. Notwithstanding any other provision of this
Agreement, the Corporation hereby agrees to indemnify the Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Corporation's Certificate, the By-laws, or by statute. In the event of any
change, after the date of this Agreement, in any applicable law, statute, or
rule which expands the right of a Delaware corporation to indemnify a member of
its board of directors or an officer, such change shall be deemed to be within
the purview of the Indemnitee's rights and the Corporation's obligations under
this Agreement. In the event of any change in any applicable law, statute or
rule which narrows the right of a Delaware corporation to indemnify a member of
its board of directors or an officer, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder.
15. Notice to Insurers. If, at the time of the receipt of a
written request of Indemnitee pursuant to Paragraph 8 hereof, the Corporation
has director and officer liability insurance in effect, the Corporation shall
give prompt notice of the commencement of such proceeding 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,
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on behalf of the Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policies.
16. Selection of Counsel. In the event the Corporation shall
be obligated under Paragraphs 3, 4, 5, or 6 hereof to pay the expenses of any
Proceeding against Indemnitee, the Corporation, if appropriate, shall be
entitled to assume the defense of such Proceeding, with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld or delayed, upon
delivery to Indemnitee of written notice of the Corporation's 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: (a) Indemnitee
shall have the right to employ his or own her counsel in any such proceeding at
Indemnitee's expense; and (b) if (i) the employment of counsel by Indemnitee has
been previously authorized by the Corporation, or (ii) 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.
17. Arbitration. With the exception of the provisions of
Paragraph 9 hereof, any dispute, controversy or claim between Indemnitee and the
Corporation arising out of or relating to or concerning the provisions of this
Agreement, shall be finally settled by arbitration in the City of Cleveland,
State of Ohio, before a single arbitrator agreeable to both parties. If the
parties cannot agree on a designated arbitrator, arbitration shall proceed in
the City of Cleveland, State of Ohio, before an arbitrator appointed by the
American Arbitration Association (the "AAA"). In either case, the arbitration
proceeding shall commence promptly in accordance with the commercial arbitration
rules of the AAA then in effect and the arbitrator shall be an attorney other
than an attorney who has, or is associated with a firm having associated with it
an attorney who has been retained by or performed services for the Corporation
or Indemnitee at any time during the five years preceding the commencement of
the arbitration. The award shall be rendered in such form that judgment may be
entered thereon in any court having jurisdiction thereof.
18. Continuation of Rights and Obligations. All rights and
obligations of the Corporation and Indemnitee hereunder shall continue in full
force and effect despite the subsequent amendment or modification of the
Corporation's Certificate or By-Laws, as such are in effect on the date hereof,
and such rights and obligations shall not be affected by any such amendment or
modification, any resolution of directors or stockholders of the Corporation, or
by any other corporate action which conflicts with or purports to amend, modify,
limit or eliminate any of the rights or obligations of the Corporation and/or
Indemnitee hereunder.
19. Amendment and Modification. This Agreement may only be
amended, modified or supplemented by the written agreement of the Corporation
and Indemnitee.
20. Assignment. This Agreement shall not be assigned by the
Corporation or Indemnitee without the prior written consent of the other party
thereto, except that the Corporation
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may freely assign its rights and obligations under this Agreement to any
subsidiary for whom Indemnitee is serving as a director and/or officer thereof;
provided, however, that no permitted assignment shall release the assignor from
its obligations hereunder. Subject to the foregoing, this Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, including, without
limitation, any successor to the Corporation by way of merger, consolidation
and/or sale or disposition of all or substantially all of the capital stock of
the Corporation.
21. Saving Clause. If this Agreement or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated or by any other applicable law.
22. Counterparts. This Agreement may be executed in two or
more fully or partially executed counterparts each of which shall be deemed an
original binding the signer thereof against the other signing parties, but all
counterparts together shall constitute one and the same instrument. Executed
signature pages may be removed from counterpart agreements and attached to one
or more fully executed copies of this Agreement. The parties may execute and
deliver this Agreement by facsimile signature, which shall have the same binding
effect as an original ink signature.
23. Notice. Indemnitee shall, as a condition precedent to his
or her right to be indemnified under this Agreement, give to the Corporation
notice in writing as soon as practicable of any claim made against him or her
for which indemnity will or could be sought under this Agreement. Notice to the
Corporation shall be directed to the Corporation at X.X. Xxx 000, 0000 Xxxxx
Xxxx, Xxxxxx, Xxxx 00000, Attention: General Counsel (or such other address as
the Corporation shall designate in writing to Indemnitee). Notice shall be
deemed received three days after the date postmarked if sent by prepaid mail,
properly addressed. In addition, Indemnitee shall give the Corporation such
information and cooperation as it may reasonably require within Indemnitee's
power.
24. Applicable Law. All matters with respect to this
Agreement, including, without limitation, matters of validity, construction,
effect and performance shall be governed by the internal laws of the State of
Delaware applicable to contracts made and to be performed therein between the
residents thereof (regardless of the laws that might otherwise be applicable
under principles of conflicts of law).
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be duly executed and signed as of the day and year first above
written.
RPM INTERNATIONAL INC.
THE "CORPORATION"
By_________________________________
Xxxxx X. Xxxxxxxx, President and Chief
Executive Officer
"INDEMNITEE"
___________________________________
Name:______________________________
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