Exhibit 10.5
DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT, dated as of ________ __, 2002 (this
"Agreement"), is made by and between ENPRO INDUSTRIES, INC., a North Carolina
corporation (the "Company"), and _________________________ ("Indemnitee").
RECITALS
A. It is important to the Company to attract and retain as directors
and officers the most capable persons reasonably available.
B. Indemnitee is a director and/or officer of the Company.
C. Both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
companies in today's environment.
D. The Company's Restated Articles of Incorporation and By-laws
(together, the "Constituent Documents") provide that the Company will indemnify
its directors and officers and will advance expenses in connection therewith,
and Indemnitee's willingness to serve as a director and/or officer of the
Company, or at the Company's request to serve another entity in any capacity, is
based in part on Indemnitee's reliance on such provisions.
E. In recognition of Indemnitee's need for substantial protection
against personal liability in order to encourage Indemnitee's continued service
to the Company or, at the Company's request, another entity, in an effective
manner, and Indemnitee's reliance on the aforesaid provisions of the Constituent
Documents, and to provide Indemnitee with express contractual indemnification
(regardless of, among other things, any amendment to or revocation of such
provisions or any change in the composition of the Company's Board of Directors
(the "Board") or any acquisition, disposition or other business combination
transaction relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of Indemnifiable Losses (as defined in Section
1(d)) and the advancement of Expenses (as defined in Section 1(c)) to Indemnitee
as set forth in this Agreement and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies.
NOW, THEREFORE, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. In addition to terms defined elsewhere herein, the
following terms have the following meanings when used in this Agreement
with initial capital letters:
(a) "AFFILIATE" has the meaning given to that term in Rule 405
under the Securities Act of 1933, provided, however, that for
purposes of this Agreement the Company and its subsidiaries
will not be deemed to constitute Affiliates of Indemnitee or
the Indemnitee.
(b) "CLAIM" means any threatened, pending or completed action,
suit or proceeding (whether civil, criminal, administrative,
arbitrative, investigative or
other), whether instituted by the Company or any other party
(including, without limitation, any governmental entity), or
any inquiry or investigation, whether instituted by the
Company or any other party (including, without limitation, any
governmental entity) that Indemnitee in good faith believes
might lead to the institution of any such action, suit or
proceeding.
(c) "EXPENSES" includes all attorneys' and experts' fees, expenses
and charges and all other costs, expenses and obligations paid
or incurred in connection with investigating, defending, or
participating (as a party, a witness, or otherwise) in
(including on appeal), or preparing to defend or participate
in, any Claim.
(d) "INDEMNIFIABLE LOSSES" means any and all Expenses, damages,
losses, liabilities, judgments, fines, penalties and amounts
paid or payable in settlement (including, without limitation,
all interest, assessments and other charges paid or payable in
connection with or in respect of any of the foregoing)
relating to, resulting from or arising out of any act or
failure to act by the Indemnitee, or his or her status as any
person referred to in clause (i) of this sentence, (i) in his
or her capacity as a director, officer, employee or agent of
the Company, any of its Affiliates or any other entity as to
which the Indemnitee is or was serving at the request of the
Company as a director, officer, employee, member, manager,
trustee, agent or any other capacity of another corporation,
limited liability company, partnership, joint venture, trust
or other entity or enterprise, whether or not for profit and
(ii) in respect of any business, transaction or other activity
of any entity referred to in clause (i) of this sentence.
2. BASIC INDEMNIFICATION ARRANGEMENT. The Company will indemnify and hold
harmless Indemnitee to the fullest extent permitted by the laws of the
State of North Carolina in effect on the date hereof or as such laws
may from time to time hereafter be amended to increase the scope of
such permitted indemnification (but in no case less than the extent
permitted under the laws in effect as of the date hereof) against all
Indemnifiable Losses relating to, resulting from or arising out of any
Claim. The failure by Indemnitee to notify the Company of such Claim
will not relieve the Company from any liability hereunder unless, and
only to the extent that, the Company did not otherwise learn of the
Claim and such failure results in forfeiture by the Company of
substantial defenses, rights or insurance coverage. Except as provided
in Sections 4 and 18, Indemnitee will not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer
of the Company unless the Company has joined in or consented to the
initiation of such Claim.
3. ADVANCEMENT OF EXPENSES. The Indemnitee's right to indemnification in
Section 2 of this Agreement shall include the right of Indemnitee to be
advanced by the Company any Expenses. If so requested by Indemnitee,
the Company will advance within two business days of such request any
and all Expenses to Indemnitee which Indemnitee reasonably determines
likely to be payable; provided, however, that Indemnitee will return,
without interest, any such advance which remains unspent at the final
conclusion of the Claim to which the advance related; and provided,
further, that, except as provided
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in Section 18, all amounts advanced in respect of such Expenses shall
be repaid to the Company by Indemnitee if it shall ultimately be
determined in a final judgment that Indemnitee is not entitled to be
indemnified for such Expenses.
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES. Without limiting the
generality or effect of the foregoing, the Company will indemnify
Indemnitee against and, if requested by Indemnitee, will within two
business days of such request advance to Indemnitee, any and all
attorneys' fees and other Expenses paid or incurred by Indemnitee in
connection with any Claim asserted or brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under
this Agreement or any other agreement or under any provision of the
Company's Constituent Documents now or hereafter in effect relating to
Claims for Indemnifiable Losses and/or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is determined to
be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be.
5. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a
portion of any Indemnifiable Loss but not for all of the total amount
thereof, the Company will nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover,
notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an
Indemnifiable Loss or in defense of any issue or matter therein,
including, without limitation, dismissal without prejudice, Indemnitee
will be indemnified against all Expenses incurred in connection
therewith. In connection with any determination as to whether
Indemnitee is entitled to be indemnified hereunder, there will be a
presumption that Indemnitee is so entitled, and the burden of proof
shall, to the extent permitted by law, be on the Company to establish
that Indemnitee is not so entitled.
6. NO OTHER PRESUMPTION. For purposes of this Agreement, the termination
of any Claim by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere or its
equivalent, will not create a presumption that Indemnitee did not meet
any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by
applicable law.
7. NON-EXCLUSIVITY, ETC. The rights of Indemnitee hereunder will be in
addition to any other rights Indemnitee may have under the Constituent
Documents, or the substantive laws of the Company's jurisdiction of
incorporation, any other contract or otherwise (collectively, "Other
Indemnity Provisions"); provided, however, that (i) to the extent that
Indemnitee otherwise would have any greater right to indemnification
under any Other Indemnity Provision, Indemnitee will be deemed to have
such greater right hereunder and (ii) to the extent that any change is
made to any Other Indemnity Provision which permits any greater right
to indemnification than that provided under this Agreement as of the
date hereof, Indemnitee will be deemed to have such greater right
hereunder. The Company will not adopt any amendment to any of the
Constituent
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Documents the effect of which would be to deny, diminish or encumber
Indemnitee's right to indemnification under this Agreement or any Other
Indemnity Provision.
8. LIABILITY INSURANCE. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability
insurance (the "D&O Insurance"), Indemnitee will be covered by such
policy or policies, in accordance with its or their terms, to the
maximum extent of the coverage available for any director or officer of
the Company. Notwithstanding the foregoing, the Company shall not be
required to cover the Indemnitee under its D&O Insurance to the same
extent as other directors or officers of the Company, or at all, if the
Company determines in good faith that such insurance is not available,
or the premium costs (or increases in premium costs of other directors
or officers of the Company as a result of such coverage) for such
insurance is materially disproportionate to the amount of coverage
provided.
9. SUBROGATION. In the event of payment under this Agreement, the Company
will be subrogated to the extent of such payment to all of the related
rights of recovery of Indemnitee against other persons or entities
(other than Indemnitee's successors). The Indemnitee will execute all
papers reasonably required to evidence such rights (all of Indemnitee's
reasonable Expenses, including attorneys' fees and charges, related
thereto to be reimbursed by or, at the option of Indemnitee, advanced
by the Company).
10. NO DUPLICATION OF PAYMENTS. The Company will not be liable under this
Agreement to make any payment in connection with any Indemnifiable Loss
made against Indemnitee to the extent Indemnitee has otherwise actually
received payment (net of Expenses incurred in connection therewith)
under any insurance policy, the Constituent Documents and Other
Indemnity Provisions or otherwise of the amounts otherwise
indemnifiable hereunder provided that, if Indemnitee for any reason is
required to disgorge any payment actually received by him, the Company
shall be obligated to pay such amount to Indemnitee in accordance with
the other terms of this Agreement (i.e., disregarding the terms of this
Section 10).
11. DEFENSE OF CLAIMS. The Company will be entitled to participate in the
defense (including, without limitation, the negotiation and approval of
any settlement) of any Claim in respect of which Indemnitee may seek
indemnification from the Company hereunder, or to assume the defense
thereof, with counsel reasonably satisfactory to the Indemnitee,
provided that in the event that (i) the use of counsel chosen by the
Company to represent Indemnitee would present such counsel with an
actual or potential conflict, (ii) the named parties in any such Claim
(including any impleaded parties) include both the Company and
Indemnitee and Indemnitee shall conclude that there may be one or more
legal defenses available to him or her that are different from or in
addition to those available to the Company, or (iii) any such
representation by the Company would be precluded under the applicable
standards of professional conduct then prevailing, then Indemnitee will
be entitled to retain separate counsel (but not more than one law firm
plus, if applicable, local counsel in respect of any particular Claim)
at the Company's expense. Notwithstanding the preceding sentence, in
any event the Company shall be liable to Indemnitee under this
Agreement for the reasonable costs of investigation and preparation for
the defense of any Claim (including, without limitation, appearing as a
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witness and reasonable fees and expenses of counsel in connection
therewith). The Company will not, without the prior written consent of
the Indemnitee, effect any settlement of any threatened or pending
Claim that the Indemnitee is or could have been a party to unless such
settlement solely involves the payment of money and includes an
unconditional release of the Indemnitee from all liability on any
claims that are the subject matter of such Claim.
12. SUCCESSORS AND BINDING AGREEMENT. (a) The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all
of the business or assets of the Company (a "Successor"), by agreement
in form and substance satisfactory to Indemnitee and his or her
counsel, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent the Company would be required to
perform if no such succession had taken place. This Agreement will be
binding upon and inure to the benefit of the Company and may be
assigned to a Successor, but will not otherwise be assignable or
delegatable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable
by the Indemnitee's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
legatees and other successors.
(c) This Agreement is personal in nature and neither of the
parties hereto will, without the consent of the other, assign
or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 12(a) and
12(b). Without limiting the generality or effect of the
foregoing, Indemnitee's right to receive payments hereunder
will not be assignable, whether by pledge, creation of a
security interest or otherwise, other than by a transfer by
the Indemnitee's will or by the laws of descent and
distribution, and, in the event of any attempted assignment or
transfer contrary to this Section 12(c), the Company will have
no liability to pay any amount so attempted to be assigned or
transferred.
13. NOTICES. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals,
required or permitted to be given hereunder will be in writing and will
be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally
confirmed), or five business days after having been mailed by United
States registered or certified mail, return receipt requested, postage
prepaid or one business day after having been sent for next-day
delivery by a nationally recognized overnight courier service,
addressed to the Company (to the attention of the Secretary of the
Company) and to the Indemnitee at the addresses shown on the signature
page hereto, or to such other address as any party may have furnished
to the other in writing and in accordance herewith, except that notices
of changes of address will be effective only upon receipt.
14. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in
accordance with the substantive laws of the State of North Carolina,
without giving effect to the principles of conflict of laws of such
State. Each party consents to non-exclusive jurisdiction of the North
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Carolina Superior Court in Mecklenburg County, North Carolina or the
United States District Court for the Western District of North Carolina
(Charlotte Division) for purposes of any action, suit or proceeding
hereunder, waives any objection to venue therein or any defense based
on forum non conveniens or similar theories and agrees that service of
process may be effected in any such action, suit or proceeding by
notice given in accordance with Section 13.
15. VALIDITY. If any provision of this Agreement or the application of any
provision hereof to any person or circumstance is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstance
will not be affected, and the provision so held to be invalid,
unenforceable or otherwise illegal will be reformed to the extent, and
only to the extent, necessary to make it enforceable, valid or legal.
16. MISCELLANEOUS. No provision of this Agreement may be waived, modified
or discharged unless such waiver, modification or discharge is agreed
to in writing signed by Indemnitee and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be
performed by such other party will be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have
been made by either party that are not set forth expressly in this
Agreement. References to Sections are to references to Sections of this
Agreement.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of
which together will constitute one and the same agreement.
18. LEGAL FEES AND EXPENSES. It is the intent of the Company that the
Indemnitee not be required to incur legal fees and or other Expenses
associated with the interpretation, enforcement or defense of
Indemnitee's rights under this Agreement by litigation or otherwise
because the cost and expense thereof would substantially detract from
the benefits intended to be extended to the Indemnitee hereunder.
Accordingly, without limiting the generality or effect of any other
provision hereof, if it should appear to the Indemnitee that the
Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes or
threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or
proceeding designed to deny, or to recover from, the Indemnitee the
benefits provided or intended to be provided to the Indemnitee
hereunder, the Company irrevocably authorizes the Indemnitee from time
to time to retain counsel of Indemnitee's choice, at the expense of the
Company as hereafter provided, to advise and represent the Indemnitee
in connection with any such interpretation, enforcement or defense,
including without limitation the initiation or defense of any
litigation or other legal action, whether by or against the Company or
any director, officer, stockholder or other person affiliated with the
Company. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company
irrevocably consents to the Indemnitee's entering into an
attorney-client relationship with
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such counsel, and in that connection the Company and the Indemnitee
agree that a confidential relationship shall exist between the
Indemnitee and such counsel. Without respect to whether the Indemnitee
prevails, in whole or in part, in connection with any of the foregoing,
the Company will pay and be solely financially responsible for any and
all attorneys' and related fees and expenses incurred by the Indemnitee
in connection with any of the foregoing.
19. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION; PROCEDURE UPON
APPLICATION. Except as provided in Section 3, any indemnification under
this Agreement shall be made as soon as practicable but in any event no
later than 30 days after receipt of the written request of the
Indemnitee for such indemnification (such request to be accompanied by
reasonable supporting documentation of the Indemnifiable Losses),
unless a determination is made within said 30 day period by (a) the
Board by a majority vote of a quorum thereof consisting of directors
who were not parties to such proceedings, or (b) independent legal
counsel in a written opinion (which counsel shall be appointed if such
a quorum is not obtainable), that the Indemnitee has not met the
relevant standards for indemnification set forth in this Agreement. In
the case of either (a) or (b) above, the Company shall send prompt
written notice to the Indemnitee of such determination.
20. CERTAIN INTERPRETIVE MATTERS. No provision of this Agreement will be
interpreted in favor of, or against, either of the parties hereto by
reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to
which any such provision is inconsistent with any prior draft hereof or
thereof.
IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly
authorized representative to execute this Agreement as of the date first above
written.
ENPRO INDUSTRIES, INC.
[Address]
By:_________________________________________
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
[NAME]
[Address]
____________________________________________
[Name]
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