EXHIBIT 10.19
FORM OF
DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
This Director and Officer Indemnification Agreement, dated as of
___________, 2003 (this "AGREEMENT"), is made by and between International Steel
Group Inc., a Delaware corporation (the "COMPANY"), and _____________________
("INDEMNITEE").
RECITALS:
A. Section 141 of the Delaware General Corporation Law provides
that the business and affairs of a corporation shall be managed under the
direction of its board of directors.
B. Pursuant to Sections 141 and 142 of the Delaware General
Corporation Law, significant authority with respect to the management of the
Company has been delegated to the officers of the Company.
C. By virtue of the managerial prerogatives vested in the
directors and officers of a Delaware corporation, directors and officers act as
fiduciaries of the corporation and its stockholders.
D. Thus, it is critically important to the Company and its
stockholders that the Company be able to attract and retain the most capable
persons reasonably available to serve as directors and officers of the Company.
E. In recognition of the need for corporations to be able to
induce capable and responsible persons to accept positions in corporate
management, Delaware law authorizes (and in some instances requires)
corporations to indemnify their directors and officers, and further authorizes
corporations to purchase and maintain insurance for the benefit of their
directors and officers.
F. The Delaware courts have recognized that indemnification by a
corporation serves the dual policies of (1) allowing corporate officials to
resist unjustified lawsuits, secure in the knowledge that, if vindicated, the
corporation will bear the expense of litigation and (2) encouraging capable
women and men to serve as corporate directors and officers, secure in the
knowledge that the corporation will absorb the costs of defending their honesty
and integrity.
G. The number of lawsuits challenging the judgment and actions of
directors and officers of Delaware corporations, the costs of defending those
lawsuits, and the threat to directors' and officers' personal assets have all
materially increased over the past several years, chilling the willingness of
capable women and men to undertake the responsibilities imposed on corporate
directors and officers.
H. Recent federal legislation and rules adopted by the Securities
and Exchange Commission and the national securities exchanges have imposed
additional disclosure and corporate governance obligations on directors and
officers of public companies and have exposed such directors and officers to new
and substantially broadened civil liabilities.
I. These legislative and regulatory initiatives have also exposed
directors and officers of public companies to a significantly greater risk of
criminal proceedings, with attendant defense costs and potential criminal fines
and penalties.
J. Under Delaware law, a director's and officer's right to be
reimbursed for the costs of defense of criminal actions, whether such claims are
asserted under state or federal law, does not depend upon the merits of the
claims asserted against the director or officer and is separate and distinct
from any right to indemnification the director or officer may be able to
establish, and indemnification of the director or officer against criminal fines
and penalties is permitted if the director or officer satisfies the applicable
standard of conduct.
K. Indemnitee is a director and officer of the Company and
his/her willingness to serve in such capacity is predicated, in substantial
part, upon the Company's willingness to indemnify him/her in accordance with the
principles reflected above, to the fullest extent permitted by the laws of the
state of Delaware, and upon the other undertakings set forth in this Agreement.
L. Therefore, in recognition of the need to provide Indemnitee
with substantial protection against personal liability, in order to procure
Indemnitee's continued service as a director and officer of the Company and to
enhance Indemnitee's ability to serve the Company in an effective manner, and in
order to provide such protection pursuant to express contract rights (intended
to be enforceable irrespective of, among other things, any amendment to the
Company's certificate of incorporation or bylaws (collectively, the "CONSTITUENT
DOCUMENTS"), any change in the composition of the Company's Board of Directors
(the "BOARD") or any change-in-control or business combination transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancement of Expenses (as defined in Section
1(c)) to Indemnitee as set forth in this Agreement and for the continued
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies.
M. In light of the considerations referred to in the preceding
recitals, it is the Company's intention and desire that the provisions of this
Agreement be construed liberally, subject to their express terms, to maximize
the protections to be provided to Indemnitee hereunder.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. In addition to terms defined elsewhere herein,
the following terms have the following meanings when used in this Agreement with
initial capital letters:
(a) "CHANGE IN CONTROL" means the occurrence after the date of
this Agreement of any of the following events:
(i) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(a "PERSON") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the combined voting power
of the then-outstanding Voting Stock of the Company; provided, however, that:
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(A) for purposes of this Section
1(a)(i), the following acquisitions shall not constitute a Change in Control:
(1) any acquisition of Voting Stock of the Company directly from the Company
that is approved by a majority of the Incumbent Directors, (2) any acquisition
of Voting Stock of the Company by the Company or any Subsidiary, (3) any
acquisition of Voting Stock of the Company by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary, and (4)
any acquisition of Voting Stock of the Company by any Person pursuant to a
Business Combination that complies with clauses (1), (2) and (3) of Section
1(a)(iii) below;
(B) if any Person acquires beneficial
ownership of 20% or more of combined voting power of the then-outstanding Voting
Stock of the Company as a result of a transaction described in clause (A)(1) of
Section 1(a)(i) and such Person thereafter becomes the beneficial owner of any
additional shares of Voting Stock of the Company representing 1% or more of the
then-outstanding Voting Stock of the Company, other than in an acquisition
directly from the Company that is approved by a majority of the Incumbent
Directors or other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Voting Stock are
treated equally, such subsequent acquisition shall be deemed to constitute a
Change in Control;
(C) a Change in Control will not be
deemed to have occurred if a Person acquires beneficial ownership of 20% or more
of the Voting Stock of the Company as a result of a reduction in the number of
shares of Voting Stock of the Company outstanding unless and until such Person
thereafter becomes the beneficial owner of any additional shares of Voting Stock
of the Company representing 1% or more of the then-outstanding Voting Stock of
the Company, other than in an acquisition directly from the Company that is
approved by a majority of the Incumbent Directors or other than as a result of a
stock dividend, stock split or similar transaction effected by the Company in
which all holders of Voting Stock are treated equally; and
(D) if at least a majority of the
Incumbent Directors determine in good faith that a Person has acquired
beneficial ownership of 20% or more of the Voting Stock of the Company
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares so that such Person beneficially owns less than 20% of the
Voting Stock of the Company, then no Change in Control shall have occurred as a
result of such Person's acquisition; or
(ii) a majority of the Directors are not
Incumbent Directors; or
(iii) the consummation of a reorganization, merger
or consolidation, or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets of another corporation,
or other transaction (each, a "BUSINESS COMBINATION"), unless, in each case,
immediately following such Business Combination (A) all or substantially all of
the individuals and entities who were the beneficial owners of Voting Stock of
the Company immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries), (B) no Person (other than
the
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Company, such entity resulting from such Business Combination, or any employee
benefit plan (or related trust) sponsored or maintained by the Company, any
Subsidiary or such entity resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of the combined voting power of the
then outstanding shares of Voting Stock of the entity resulting from such
Business Combination, and (C) at least a majority of the members of the Board of
Directors of the entity resulting from such Business Combination were Incumbent
Directors at the time of the execution of the initial agreement or of the action
of the Board providing for such Business Combination; or
(iv) approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company, except pursuant to a
Business Combination that complies with clauses (A), (B) and (C) of Section
1(a)(iii).
(v) For purposes of this Section 1(a), the
following terms shall have the following meanings:
(A) "EXCHANGE ACT" shall mean the
Securities Exchange Act of 1934, as amended.
(B) "INCUMBENT DIRECTORS" means the
individuals who, as of the date hereof, are Directors of the Company and any
individual becoming a Director subsequent to the date hereof whose election,
nomination for election by the Company's stockholders, or appointment, was
approved by a vote of at least two-thirds of the then Incumbent Directors
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without objection to
such nomination); provided, however, that an individual shall not be an
Incumbent Director if such individual's election or appointment to the Board
occurs as a result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of
Directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board.
(C) "SUBSIDIARY" means an entity in
which the Company directly or indirectly beneficially owns 50% or more of the
outstanding Voting Stock.
(D) "VOTING STOCK" means securities
entitled to vote generally in the election of directors (or similar governing
bodies).
(b) "CLAIM" means (i) any threatened, asserted, pending or
completed claim, demand, action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether made pursuant
to federal, state or other law; and (ii) any inquiry or investigation, whether
made, instituted or conducted by the Company or any other party, including
without limitation any federal, state or other governmental entity, that
Indemnitee determines might lead to the institution of any such claim, demand,
action, suit or proceeding.
(c) "CONTROLLED AFFILIATE" means any corporation, limited
liability company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, that is directly or indirectly controlled
by the Company. For purposes of this definition, "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
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management or policies of an entity or enterprise, whether through the ownership
of voting securities, through other voting rights, by contract or otherwise;
provided that direct or indirect beneficial ownership of capital stock or other
interests in an entity or enterprise entitling the holder to cast 20% or more of
the total number of votes generally entitled to be cast in the election of
directors (or persons performing comparable functions) of such entity or
enterprise shall be deemed to constitute control for purposes of this
definition.
(d) "DISINTERESTED DIRECTOR" means a director of the Company
who is not and was not a party to the Claim in respect of which indemnification
is sought by Indemnitee.
(e) "EXPENSES" means attorneys' and experts' fees and expenses
and all other costs and expenses paid or payable in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to investigate, defend, be a witness in or participate in
(including on appeal), any Claim.
(f) "INDEMNIFIABLE CLAIM" means any Claim based upon, arising
out of or resulting from (i) any actual, alleged or suspected act or failure to
act by Indemnitee in his or her capacity as a director, officer, employee or
agent of the Company or as a director, officer, employee, member, manager,
trustee or agent of any other corporation, limited liability company,
partnership, joint venture, trust or other entity or enterprise, whether or not
for profit, as to which Indemnitee is or was serving at the request of the
Company as a director, officer, employee, member, manager, trustee or agent,
(ii) any actual, alleged or suspected act or failure to act by Indemnitee in
respect of any business, transaction, communication, filing, disclosure or other
activity of the Company or any other entity or enterprise referred to in clause
(i) of this sentence, or (iii) Indemnitee's status as a current or former
director, officer, employee or agent of the Company or as a current or former
director, officer, employee, member, manager, trustee or agent of the Company or
any other entity or enterprise referred to in clause (i) of this sentence or any
actual, alleged or suspected act or failure to act by Indemnitee in connection
with any obligation or restriction imposed upon Indemnitee by reason of such
status. In addition to any service at the actual request of the Company, for
purposes of this Agreement, Indemnitee shall be deemed to be serving or to have
served at the request of the Company as a director, officer, employee, member,
manager, trustee or agent of another entity or enterprise if Indemnitee is or
was serving as a director, officer, employee, member, manager, trustee or
employee of such entity or enterprise and (i) such entity or enterprise is or at
the time of such service was a Controlled Affiliate, (ii) such entity or
enterprise is or at the time of such service was an employee benefit plan (or
related trust) sponsored or maintained by the Company or a Controlled Affiliate,
or (iii) the Company or a Controlled Affiliate directly or indirectly caused
Indemnitee to be nominated, elected, appointed, designated, employed, engaged or
selected to serve in such capacity.
(g) "INDEMNIFIABLE LOSSES" means any and all Losses relating
to, arising out of or resulting from any Indemnifiable Claim.
(h) "INDEPENDENT COUNSEL" means a law firm, or a member of a
law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i)
the Company or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this Agreement, or
of other indemnitees under similar indemnification agreements), or (ii) any
other party to the
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Indemnifiable Claim giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
(i) "LOSSES" means any and all Expenses, damages, losses,
liabilities, judgments, fines, penalties (whether civil, criminal or other) and
amounts paid in settlement, including without limitation all interest,
assessments and other charges paid or payable in connection with or in respect
of any of the foregoing.
2. INDEMNIFICATION OBLIGATION. Subject to Section 7, the Company shall
indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted
by the laws of the State of Delaware in effect on the date hereof or as such
laws may from time to time hereafter be amended to increase the scope of such
permitted indemnification, against any and all Indemnifiable Claims and
Indemnifiable Losses; provided, however, that, except as provided in Sections 5
and 20, Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by Indemnitee against the
Company or any director or officer of the Company unless the Company has joined
in or consented to the initiation of such Claim.
3. ADVANCEMENT OF EXPENSES. Indemnitee shall have the right to
advancement by the Company prior to the final disposition of any Indemnifiable
Claim of any and all Expenses relating to, arising out of or resulting from any
Indemnifiable Claim paid or incurred by Indemnitee or which Indemnitee
determines are reasonably likely to be paid or incurred by Indemnitee.
Indemnitee's right to such advancement is not subject to the satisfaction of any
standard of conduct. Without limiting the generality or effect of the foregoing,
within five business days after any request by Indemnitee, the Company shall, in
accordance with such request (but without duplication), (a) pay such Expenses on
behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to
pay such Expenses, or (c) reimburse Indemnitee for such Expenses; provided that
Indemnitee shall repay, without interest any amounts actually advanced to
Indemnitee that, at the final disposition of the Indemnifiable Claim to which
the advance related, were in excess of amounts paid or payable by Indemnitee in
respect of Expenses relating to, arising out of or resulting from such
Indemnifiable Claim. In connection with any such payment, advancement or
reimbursement, Indemnitee shall execute and deliver to the Company an
undertaking, which need not be secured and shall be accepted without reference
to Indemnitee's ability to repay the Expenses, by or on behalf of the
Indemnitee, to repay any amounts paid, advanced or reimbursed by the Company in
respect of Expenses relating to, arising out of or resulting from any
Indemnifiable Claim in respect of which it shall have been determined, following
the final disposition of such Indemnifiable Claim and in accordance with Section
7, that Indemnitee is not entitled to indemnification hereunder.
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES. Without limiting the
generality or effect of the foregoing, the Company shall indemnify and hold
harmless Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee for, or advance to Indemnitee, within five business days of such
request, any and all Expenses paid or incurred by Indemnitee or which Indemnitee
determines are reasonably likely to be paid or incurred by Indemnitee in
connection with any Claim made, instituted or conducted by Indemnitee for (a)
indemnification or
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reimbursement or advance payment of Expenses by the Company under any provision
of this Agreement, or under any other agreement or provision of the Constituent
Documents now or hereafter in effect relating to Indemnifiable Claims, and/or
(b) recovery under any directors' and officers' liability insurance policies
maintained by the Company, regardless in each case of whether Indemnitee
ultimately is determined to be entitled to such indemnification, reimbursement,
advance or insurance recovery, as the case may be; provided, however, that
Indemnitee shall return, without interest, any such advance of Expenses (or
portion thereof) which remains unspent at the final disposition of the Claim to
which the advance related.
5. PARTIAL INDEMNITY. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of any
Indemnifiable Loss but not for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.
6. PROCEDURE FOR NOTIFICATION. To obtain indemnification under this
Agreement in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee
shall submit to the Company a written request therefor, including a brief
description (based upon information then available to Indemnitee) of such
Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of
such request, the Company has directors' and officers' liability insurance in
effect under which coverage for such Indemnifiable Claim or Indemnifiable Loss
is potentially available, the Company shall give prompt written notice of such
Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in
accordance with the procedures set forth in the applicable policies. The Company
shall provide to Indemnitee a copy of such notice delivered to the applicable
insurers, and copies of all subsequent correspondence between the Company and
such insurers regarding the Indemnifiable Claim or Indemnifiable Loss, in each
case substantially concurrently with the delivery or receipt thereof by the
Company. The failure by Indemnitee to timely notify the Company of any
Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company from any
liability hereunder unless, and only to the extent that, the Company did not
otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and such
failure results in forfeiture by the Company of substantial defenses, rights or
insurance coverage.
7. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) To the extent that Indemnitee shall have been successful
on the merits or otherwise in defense of any Indemnifiable Claim or any portion
thereof or in defense of any issue or matter therein, including without
limitation dismissal without prejudice, Indemnitee shall be indemnified against
all Indemnifiable Losses relating to, arising out of or resulting from such
Indemnifiable Claim in accordance with Section 2 and no Standard of Conduct
Determination (as defined in Section 7(b)) shall be required.
(b) To the extent that the provisions of Section 7(a) are
inapplicable to an Indemnifiable Claim that shall have been finally disposed of,
any determination of whether Indemnitee has satisfied any applicable standard of
conduct under Delaware law that is a legally required condition precedent to
indemnification of Indemnitee hereunder against Indemnifiable Losses relating
to, arising out of or resulting from such Indemnifiable Claim (a "STANDARD OF
CONDUCT DETERMINATION") shall be made as follows: (i) if a Change in Control
shall not have occurred, or if a Change in Control shall have occurred but
Indemnitee shall have requested that the Standard of Conduct Determination be
made pursuant to this clause (i), (A) by a majority
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vote of the Disinterested Directors, even if less than a quorum of the Board,
(B) if such Disinterested Directors so direct, by a majority vote of a committee
of Disinterested Directors designated by a majority vote of all Disinterested
Directors, or (C) if there are no such Disinterested Directors, by Independent
Counsel in a written opinion addressed to the Board, a copy of which shall be
delivered to Indemnitee; and (ii) if a Change in Control shall have occurred and
Indemnitee shall not have requested that the Standard of Conduct Determination
be made pursuant to clause (i), by Independent Counsel in a written opinion
addressed to the Board, a copy of which shall be delivered to Indemnitee.
Indemnitee will cooperate with the person or persons making such Standard of
Conduct Determination, including providing to such person or persons, upon
reasonable advance request, any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. The
Company shall indemnify and hold harmless Indemnitee against and, if requested
by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within
five business days of such request, any and all costs and expenses (including
attorneys' and experts' fees and expenses) incurred by Indemnitee in so
cooperating with the person or persons making such Standard of Conduct
Determination.
(c) The Company shall use its reasonable best efforts to cause
any Standard of Conduct Determination required under Section 7(b) to be made as
promptly as practicable. If (i) the person or persons empowered or selected
under Section 7 to make the Standard of Conduct Determination shall not have
made a determination within 30 days after the later of (A) receipt by the
Company of written notice from Indemnitee advising the Company of the final
disposition of the applicable Indemnifiable Claim (the date of such receipt
being the "NOTIFICATION DATE") and (B) the selection of an Independent Counsel,
if such determination is to be made by Independent Counsel, that is permitted
under the provisions of Section 7(e) to make such determination and (ii)
Indemnitee shall have fulfilled its obligations set forth in the second sentence
of Section 7(b), then Indemnitee shall be deemed to have satisfied the
applicable standard of conduct; provided that such 30-day period may be extended
for a reasonable time, not to exceed an additional 30 days, if the person or
persons making such determination in good faith requires such additional time
for the obtaining or evaluation or documentation and/or information relating
thereto.
(d) If (i) Indemnitee shall be entitled to indemnification
hereunder against any Indemnifiable Losses pursuant to Section 7(a), (ii) no
determination of whether Indemnitee has satisfied any applicable standard of
conduct under Delaware law is a legally required condition precedent to
indemnification of Indemnitee hereunder against any Indemnifiable Losses, or
(iii) Indemnitee has been determined or deemed pursuant to Section 7(b) or (c)
to have satisfied any applicable standard of conduct under Delaware law which is
a legally required condition precedent to indemnification of Indemnitee
hereunder against any Indemnifiable Losses, then the Company shall pay to
Indemnitee, within five business days after the later of (x) the Notification
Date in respect of the Indemnifiable Claim or portion thereof to which such
Indemnifiable Losses are related, out of which such Indemnifiable Losses arose
or from which such Indemnifiable Losses resulted and (y) the earliest date on
which the applicable criterion specified in clause (i), (ii) or (iii) above
shall have been satisfied.
(e) If a Standard of Conduct Determination is to be made by
Independent Counsel pursuant to Section 7(b)(i), the Independent Counsel shall
be selected by the Board of Directors, and the Company shall give written notice
to Indemnitee advising him of the identity of the
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Independent Counsel so selected. If a Standard of Conduct Determination is to be
made by Independent Counsel pursuant to Section 7(b)(ii), the Independent
Counsel shall be selected by Indemnitee, and Indemnitee shall give written
notice to the Company advising it of the identity of the Independent Counsel so
selected. In either case, Indemnitee or the Company, as applicable, may, within
five business days after receiving written notice of selection from the other,
deliver to the other a written objection to such selection; provided, however,
that such objection may be asserted only on the ground that the Independent
Counsel so selected does not satisfy the criteria set forth in the definition of
"Independent Counsel" in Section 1(h), and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person or firm so selected shall act as Independent Counsel. If
such written objection is properly and timely made and substantiated, (i) the
Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection
is without merit and (ii) the non-objecting party may, at its option, select an
alternative Independent Counsel and give written notice to the other party
advising such other party of the identity of the alternative Independent Counsel
so selected, in which case the provisions of the two immediately preceding
sentences and clause (i) of this sentence shall apply to such subsequent
selection and notice. If applicable, the provisions of clause (ii) of the
immediately preceding sentence shall apply to successive alternative selections.
If no Independent Counsel that is permitted under the foregoing provisions of
this Section 7(e) to make the Standard of Conduct Determination shall have been
selected within 30 days after the Company gives its initial notice pursuant to
the first sentence of this Section 7(e) or Indemnitee gives its initial notice
pursuant to the second sentence of this Section 7(e), as the case may be, either
the Company or Indemnitee may petition the Court of Chancery of the State of
Delaware for resolution of any objection which shall have been made by the
Company or Indemnitee to the other'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 or firm with
respect to whom all objections are so resolved or the person or firm so
appointed will act as Independent Counsel. In all events, the Company shall pay
all of the reasonable fees and expenses of the Independent Counsel incurred in
connection with the Independent Counsel's determination pursuant to Section
7(b).
8. PRESUMPTION OF ENTITLEMENT.
(a) In making any Standard of Conduct Determination, the
person or persons making such determination shall presume that Indemnitee has
satisfied the applicable standard of conduct, and the Company may overcome such
presumption only by its adducing clear and convincing evidence to the contrary.
Any Standard of Conduct Determination that is adverse to Indemnitee may be
challenged by the Indemnitee in the Court of Chancery of the State of Delaware.
No determination by the Company (including by its directors or any Independent
Counsel) that Indemnitee has not satisfied any applicable standard of conduct
shall be a defense to any Claim by Indemnitee for indemnification or
reimbursement or advance payment of Expenses by the Company hereunder or create
a presumption that Indemnitee has not met any applicable standard of conduct.
9. NO OTHER 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
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did not meet any applicable standard of conduct or that indemnification
hereunder is otherwise not permitted.
10. NON-EXCLUSIVITY. The rights of Indemnitee hereunder will be in
addition to any other rights Indemnitee may have under the Constituent
Documents, or the substantive laws of the Company's jurisdiction of
incorporation, any other contract or otherwise (collectively, "OTHER INDEMNITY
PROVISIONS"); provided, however, that (a) to the extent that Indemnitee
otherwise would have any greater right to indemnification under any Other
Indemnity Provision, Indemnitee will be deemed to have such greater right
hereunder and (b) to the extent that any change is made to any Other Indemnity
Provision which permits any greater right to indemnification than that provided
under this Agreement as of the date hereof, Indemnitee will be deemed to have
such greater right hereunder. The Company will not adopt any amendment to any of
the Constituent Documents the effect of which would be to deny, diminish or
encumber Indemnitee's right to indemnification under this Agreement or any Other
Indemnity Provision.
11. LIABILITY INSURANCE AND FUNDING. For the duration of Indemnitee's
service as a director and/or officer of the Company, and thereafter for so long
as Indemnitee shall be subject to any pending or possible Indemnifiable Claim,
the Company shall use commercially reasonable efforts (taking into account the
scope and amount of coverage available relative to the cost thereof) to cause to
be maintained in effect policies of directors' and officers' liability insurance
providing coverage for directors and/or officers of the Company that is at least
substantially comparable in scope and amount to that provided by the Company's
current policies of directors' and officers' liability insurance. The Company
shall provide Indemnitee with a copy of all directors' and officers' liability
insurance applications, binders, policies, declarations, endorsements and other
related materials, and shall provide Indemnitee with a reasonable opportunity to
review and comment on the same. Without limiting the generality or effect of the
two immediately preceding sentences, no discontinuation or significant reduction
in the scope or amount of coverage from one policy period to the next shall be
effective (i) without the prior approval thereof by a majority vote of the
Incumbent Directors, even if less than a quorum, or (ii) if at the time that any
such discontinuation or significant reduction in the scope or amount of coverage
is proposed there are no Incumbent Directors, without the prior written consent
of Indemnitee (which consent shall not be unreasonably withheld or delayed). In
all policies of directors' and officers' liability insurance obtained by the
Company, Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits, subject to the same limitations, as are
accorded to the Company's directors and officers most favorably insured by such
policy. The Company may, but shall not be required to, create a trust fund,
grant a security interest or use other means, including without limitation a
letter of credit, to ensure the payment of such amounts as may be necessary to
satisfy its obligations to indemnify and advance expenses pursuant to this
Agreement.
12. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the related
rights of recovery of Indemnitee against other persons or entities (other than
Indemnitee's successors), including any entity or enterprise referred to in
clause (i) of the definition of "Indemnifiable Claim" in Section 1(f).
Indemnitee shall execute all papers reasonably required to evidence such rights
(all of Indemnitee's reasonable Expenses, including attorneys' fees and charges,
related thereto to be reimbursed by or, at the option of Indemnitee, advanced by
the Company).
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13. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment to Indemnitee in respect of any Indemnifiable
Losses to the extent Indemnitee has otherwise actually received payment (net of
Expenses incurred in connection therewith) under any insurance policy, the
Constituent Documents and Other Indemnity Provisions or otherwise (including
from any entity or enterprise referred to in clause (i) of the definition of
"Indemnifiable Claim" in Section 1(f)) in respect of such Indemnifiable Losses
otherwise indemnifiable hereunder.
14. DEFENSE OF CLAIMS. The Company shall be entitled to participate in
the defense of any Indemnifiable Claim or to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnitee; provided that if Indemnitee
believes, after consultation with counsel selected by Indemnitee, that (a) the
use of counsel chosen by the Company to represent Indemnitee would present such
counsel with an actual or potential conflict, (b) the named parties in any such
Indemnifiable 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 (c) any such representation by such counsel would
be precluded under the applicable standards of professional conduct then
prevailing, then Indemnitee shall be entitled to retain separate counsel (but
not more than one law firm plus, if applicable, local counsel in respect of any
particular Indemnifiable Claim) at the Company's expense. The Company shall not
be liable to Indemnitee under this Agreement for any amounts paid in settlement
of any threatened or pending Indemnifiable Claim effected without the Company's
prior written consent. The Company shall not, without the prior written consent
of the Indemnitee, effect any settlement of any threatened or pending
Indemnifiable Claim which the Indemnitee is or could have been a party unless
such settlement solely involves the payment of money and includes a complete and
unconditional release of the Indemnitee from all liability on any claims that
are the subject matter of such Indemnifiable Claim. Neither the Company nor
Indemnitee shall unreasonably withhold its consent to any proposed settlement;
provided that Indemnitee may withhold consent to any settlement that does not
provide a complete and unconditional release of Indemnitee.
15. SUCCESSORS AND BINDING AGREEMENT. (a) The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Indemnitee and his or her counsel, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. This Agreement shall
be binding upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any person acquiring directly or
indirectly all or substantially all of the business or assets of the Company
whether by purchase, merger, consolidation, reorganization or otherwise (and
such successor will thereafter be deemed the "COMPANY" for purposes of this
Agreement), but shall not otherwise be assignable or delegatable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Indemnitee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, legatees and other successors.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign or delegate this
Agreement or any rights or obligations
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hereunder except as expressly provided in Sections 15(a) and 15(b). Without
limiting the generality or effect of the foregoing, Indemnitee's right to
receive payments hereunder shall not be assignable, whether by pledge, creation
of a security interest or otherwise, other than by a transfer by the
Indemnitee's will or by the laws of descent and distribution, and, in the event
of any attempted assignment or transfer contrary to this Section 15(c), the
Company shall have no liability to pay any amount so attempted to be assigned or
transferred.
16. NOTICES. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals, required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid or one business day after having been sent
for next-day delivery by a nationally recognized overnight courier service,
addressed to the Company (to the attention of the Secretary of the Company) and
to 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.
17. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Delaware, without giving effect to the
principles of conflict of laws of such State. The Company and Indemnitee each
hereby irrevocably consent to the jurisdiction of the Chancery Court of the
State of Delaware for all purposes in connection with any action or proceeding
which arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be brought only in the Chancery Court of
the State of Delaware.
18. VALIDITY. If any provision of this Agreement or the application of
any provision hereof to any person or circumstance is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other person or circumstance shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent, and only to the extent, necessary to
make it enforceable, valid or legal. In the event that any court or other
adjudicative body shall decline to reform any provision of this Agreement held
to be invalid, unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties thereto shall take all such action
as may be necessary or appropriate to replace the provision so held to be
invalid, unenforceable or otherwise illegal with one or more alternative
provisions that effectuate the purpose and intent of the original provisions of
this Agreement as fully as possible without being invalid, unenforceable or
otherwise illegal.
19. MISCELLANEOUS. No provision of this Agreement may be waived,
modified or discharged unless such waiver, modification or discharge is agreed
to in writing signed by Indemnitee and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by
12
either party that are not set forth expressly in this Agreement. References to
Sections are to references to Sections of this Agreement.
20. LEGAL FEES AND EXPENSES. It is the intent of the Company that
Indemnitee not be required to incur legal fees and or other Expenses associated
with the interpretation, enforcement or defense of Indemnitee's rights under
this Agreement by litigation or otherwise because the cost and expense thereof
would substantially detract from the benefits intended to be extended to
Indemnitee hereunder. Accordingly, without limiting the generality or effect of
any other provision hereof, if it should appear to Indemnitee that the Company
has failed to comply with any of its obligations under this Agreement or in the
event that the Company or any other person takes or threatens to take any action
to declare this Agreement void or unenforceable, or institutes any litigation or
other action or proceeding designed to deny, or to recover from, Indemnitee the
benefits provided or intended to be provided to Indemnitee hereunder, the
Company irrevocably authorizes the Indemnitee from time to time to retain
counsel of Indemnitee's choice, at the expense of the Company as hereafter
provided, to advise and represent Indemnitee in connection with any such
interpretation, enforcement or defense, including without limitation the
initiation or defense of any litigation or other legal action, whether by or
against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company and such counsel, the
Company irrevocably consents to Indemnitee's entering into an attorney-client
relationship with such counsel, and in that connection the Company and
Indemnitee agree that a confidential relationship shall exist between Indemnitee
and such counsel. Without respect to whether Indemnitee prevails, in whole or in
part, in connection with any of the foregoing, the Company will pay and be
solely financially responsible for any and all attorneys' and related fees and
expenses incurred by Indemnitee in connection with any of the foregoing.
21. CERTAIN INTERPRETIVE MATTERS. No provision of this Agreement shall
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.
22. 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 shall constitute one and the same agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused
its duly authorized representative to execute this Agreement as of the date
first above written.
INTERNATIONAL STEEL GROUP INC.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
By: ____________________________
Name:
Title:
[INDEMNITEE]
[Address]
________________________________
[Indemnitee]
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