EXHIBIT 10.20
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made and entered into this _____ day
of (MONTH AND YEAR) by and between ACME METALS INCORPORATED, a Delaware
Corporation (hereinafter the "Company"), and (NAME), who as of the execution
date hereof is serving as (TITLE) of the Company (hereinafter the "Indemnitee").
W I T N E S S E T H:
WHEREAS, the Indemnitee is rendering valuable services to the Company;
and
WHEREAS, the Company desires to receive and continue to receive the
benefits of the Indemnitee's advice, experience, knowledge, counsel, dedication,
service to the Company and to maintain and preserve the continuity in the
management of the affairs and business of the Company for the benefit of the
Company's stockholders; and
WHEREAS, Section 145 of the General Corporation Law of the State of
Delaware ("Corporation Law") providing for the indemnification of directors,
officers, employees and agents of the Company specifically provides that the
Corporation Law is not exclusive and authorizes any corporation formed
thereunder to enter into an agreement or agreements to indemnify directors,
officers, employees, agents and former directors, officers, employees and
agents, both as to actions in their official capacity and as to actions in
another capacity while holding such office, and as to persons who have ceased to
be a director, officer, employee or agent and that such indemnification shall
inure to the benefit of the heirs, executors and administrators of such persons;
and
WHEREAS, in accordance with the authorization provided by said
Corporation Law, the Company has purchased and presently maintains a policy or
policies of Directors and Officers Liability Insurance ("D & O Insurance")
covering certain liabilities which may be incurred by its directors, officers
and employees in the performance of their duties for the Company; and
WHEREAS, recent developments with respect to the terms and availability
of D & O Insurance and with respect to the application, amendment and
enforcement of statutory and by-law indemnification provisions generally have
raised questions concerning the adequacy and reliability of the protection
afforded to directors, officers and employees thereby; and
WHEREAS, the Company wishes to insure that the Indemnitee will be in a
position to exercise his best good-faith and independent judgment for the
benefit for the Company's stockholders in the management of the business and
affairs of the Company without undue cause or concern for his personal financial
liability and secure in the knowledge that the costs, expenses, liability and
loss which may be incurred by him in his good-faith performance of his duties
and service to the Company will be borne by the Company or its successors and
assignees in accordance with applicable law and the terms of this
Indemnification Agreement; and
WHEREAS, the Company desires the Indemnitee to contest all unjustified
investigations, claims, actions, suits and proceedings which have or may arise
in the future as a result of the Indemnitee's service to the Company; and
WHEREAS, in order to resolve such questions and accomplish the foregoing
purposes and thereby induce the Indemnitee to continue to render said services
to the Company, the parties believe it appropriate and desirable to enter into
this Indemnification Agreement and memorialize and affirm the Company's
indemnification obligations to the Indemnitee, as authorized by the resolution
adopted by the Board of Directors on May 16, 1992;
NOW THEREFORE, in consideration of the mutual agreements set forth
herein, the parties hereto agree as follows:
1. DEFINITIONS
A. "Indemnitee" means any person who is, was or has agreed to
become a director, officer, employee or agent of the Company
or of any constituent corporation absorbed by the Company in a
consolidation, merger or acquisition and any person who is,
was or has agreed to become a director, officer, trustee,
employee or agent of any other enterprise and serving as such
at the request of the Company or of any such constituent
corporation, or the legal representative of any of the
foregoing persons;
B. "Other Enterprise" means any domestic or foreign corporation,
other than the Company, and any partnership, joint venture,
sole proprietorship, trust or other legal entity, whether for
profit or non-profit.
C. "Indemnifiable Litigation" means, collectively, any present or
future threatened, pending or contemplated investigation,
claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative;
D. "Indemnifiable Expenses" means the cost, expense, liability
and loss, including, but not limited to, attorney's fees and
disbursements and amounts of judgments, fines, penalties and
amounts actually paid or to be paid in any settlement approved
in advance by the Company (which approval shall not be
unreasonably withheld); PROVIDED, HOWEVER, that the same shall
not in any event, include any cost, expense, liability or loss
on account of profits realized in the purchase or sale of
securities of the Company.
2. INDEMNITY
Pursuant to its authority under Section l45 of the General
Corporation Law of the State of Delaware, its Certificate of Incorporation and
its by-laws:
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A. PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE COMPANY:
The Company hereby agrees to indemnify and hold Indemnitee
harmless from and against any and all Indemnifiable Expenses,
to the extent that the Indemnitee has not previously been
reimbursed by insurance, that may be reasonably incurred by or
imposed upon him in connection with, resulting from, or
arising out of any Indemnifiable Litigation (other than an
action by or in the right of the Company) to which the
Indemnitee is, or may become, a party, or otherwise, by reason
of him being or having been:
(a) a director, officer, employee or agent of this Company;
or
(b) a director, officer, employee or agent of any enterprise
when serving or having served as the same at the request
of this Company, whether or not he continues to be such
at the time the Indemnifiable Expenses shall be or have
been incurred or imposed, if he acted in good faith and
in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
B. PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY:
The Company hereby agrees to indemnify and hold Indemnitee
harmless from and against any and all Indemnifiable Expenses,
to the extent that the Indemnitee has not previously been
reimbursed by insurance, that may be reasonably incurred by or
imposed upon him in connection with, resulting from, or
arising out of any Indemnifiable Litigation by or in the right
of the Company to procure a judgment in its favor to which the
Indemnitee is, or may become, a party, or otherwise, by reason
of him being or having been:
(a) a director, officer, employee or agent of this Company;
or
(b) a director, officer, employee or agent of any other
enterprise when serving or having served as the same at
the request of the Company, whether or not he continues
to be such at the time the Indemnifiable Expenses shall
be or have been incurred or imposed, if he acted in good
faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company and
except that no indemnification shall be made in respect
of any claim, issue or matter as to which the Indemnitee
shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company
unless and only to the extent that the Court of Chancery
or the court in which such action or suit was brought
shall determine
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upon application that, despite the adjudication of
liability but in view of all the circumstances of the
case, the Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
C. TERMINATION OF PROCEEDINGS:
The termination of any Indemnifiable Litigation by judgment,
order, settlement, conviction, or upon a plea nolo contendere
or its equivalent shall not, of itself, create a presumption
that the Indemnitee did not act in good faith and in a manner
which he reasonably believed to be in, or not opposed to, the
best interests of this Company, and with respect to any
criminal action or proceeding, the Indemnitee had no
reasonable cause to believe his conduct was unlawful.
D. CONTINUATION OF INDEMNITY:
All agreements and obligations of the Company contained herein
shall continue during the period Indemnitee is a director,
officer, employee or agent of the Company (or is or was
serving at the request of the Company as a director, officer,
employee, trustee or agent of another enterprise) and shall
continue thereafter so long as the Indemnitee shall be subject
to any Indemnifiable Litigation or Indemnifiable Expense.
3. MAINTENANCE OF INSURANCE AND SELF INSURANCE:
A. The Company represents that as of the date hereof it presently
has in force and effect a policy or policies of D & O
Insurance with an aggregate coverage in the amount of
$50,000,000. Subject only to the provisions of Section 3B
hereof, the Company agrees, so long as the Indemnitee shall be
subject to any possible Indemnifiable Litigation or
Indemnifiable Expenses arising out of or resulting therefrom,
the Company will employ its best efforts to purchase and
maintain in effect for the benefit of Indemnitee one or more
valid, binding and enforceable policy or policies of D & O
Insurance providing, in all respects, coverage at least as
comparable to that presently provided pursuant to the existing
policy or policies of insurance.
B. Notwithstanding Section 3A above, the Company shall not be
required to maintain or to obtain in substitution thereof,
said policy or policies of D & O Insurance in effect if said
insurance, in the reasonable business judgment of the then
directors of the Company, is not reasonably available or if
either:
(a) the premium cost for such insurance is substantially
disproportionate to the amount of coverage; or
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(b) the coverage provided by such insurance is so limited by
exclusions that there is insufficient benefit from such
insurance.
C. In the event the Company does not purchase and maintain said
policy or policies of D & O Insurance pursuant to the
provisions of Section 3B hereof, the Company agrees to
indemnify and hold Indemnitee harmless to the full extent of
the coverage which would otherwise have been provided for the
benefit of Indemnitee pursuant to said insurance.
4. REPAYMENT OF INDEMNIFIABLE EXPENSES:
Indemnifiable Expenses incurred by the Indemnitee with respect to
any Indemnifiable Litigation shall be advanced by the Company to
the Indemnitee prior to the final disposition thereof upon receipt
by the Company of the undertaking by, or on behalf of, the
Indemnitee, substantially in the form attached hereto as Exhibit
"A", to repay all amounts so advanced should it ultimately be
determined that the Indemnitee is not entitled to indemnification
by the Company pursuant to this Indemnification Agreement or
otherwise.
5. LEGAL COUNSEL:
The Indemnitee shall have the right to retain independent legal
counsel to represent him in connection with any Indemnifiable
Litigation or may designate the Company as his agent for the
retention of counsel.
6. NOTIFICATION:
The Indemnitee shall promptly advise the Company, in writing, of
the institution of any Indemnifiable Litigation which is or may be
subject to this Indemnification Agreement and keep the Company
informed of and consult with the Company with respect to the status
of any such Indemnifiable Litigation.
7. RIGHTS NOT EXCLUSIVE - OTHER RIGHTS:
The rights of indemnification provided in this Indemnification
Agreement shall not be deemed exclusive of any other rights to
which the Indemnitee may be entitled to indemnification by reason
of any statute, contract, agreement, by-law, vote of stockholders
or disinterested directors, as a matter of law, or otherwise.
8. BINDING EFFECT:
This Indemnification Agreement establishes contract rights which
shall be binding upon and shall inure to the benefit of the
successors, assignees, heirs, and legal representatives to the
parties hereto.
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9. SEPARABILITY:
Each of the provisions of this Indemnification Agreement is a
separate and distinct agreement and independent of the others, so
that if any provision or paragraph of this Indemnification
Agreement, or any clause thereof, be held to be invalid, illegal or
unenforceable in whole or in part, the remaining provisions,
paragraphs and clauses of this Indemnification Agreement shall
remain fully valid, enforceable and binding on the parties hereto.
10. AMENDMENT AND TERMINATION:
No amendment, modification, termination or cancellation of this
Indemnification Agreement shall be effective unless in writing and
signed by both parties hereto.
11. GOVERNING LAW:
The validity, interpretation, performance and enforcement of this
Indemnification Agreement shall be governed by the laws of the
State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Indemnification
Agreement to be duly executed on its behalf and the Indemnitee has duly executed
this Indemnification Agreement on the day and year first above written.
(CORPORATE SEAL) ACME METALS INCORPORATED
ATTEST:
By:
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Xxxxxx X. Xxxxx, Xx. Xxxxx X. X. Xxxxxxx
Secretary Chairman and Chief Executive Officer
INDEMNITEE:
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(NAME)
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EXHIBIT A
UNDERTAKING AGREEMENT
THIS AGREEMENT is made and entered into this ______ day of _________)
l99__, between ACME METALS INCORPORATED, a Delaware corporation ("the
Company"), and __________________________________, who as of the execution date
hereof is serving as ___________________________________________ of ACME METALS
INCORPORATED ("xxx Xxxxxxxxxx").
W I T N E S S E T H:
WHEREAS, the Indemnitee may become involved in investigations, claims,
actions, suits or proceedings which have arisen or may arise in the future as a
result of the Indemnitee's service to the Company; and
WHEREAS, the Indemnitee desires that the Company pay any and all
expenses (including, but not limited to, attorney's fees and court costs)
actually and reasonably incurred by the Indemnitee or on his behalf in defending
or investigating any such matters and that such payment be made in advance of
the final disposition of such investigations, claims, actions, suits or
proceedings to the extent that the Indemnitee has not previously been reimbursed
for the same by insurance; and
WHEREAS, the Company is willing to make such advance payments but, in
accordance with Section l45 of the General Corporation Law of the State of
Delaware and Article VIII of the by-laws of the Company, the Company may make
such payments only if it receives an undertaking from the Indemnitee to repay
the same if it is determined that the Indemnitee is not entitled to
indemnification; and
WHEREAS, the Indemnitee is willing to give such an undertaking;
NOW THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:
1. In regard to any payments made either directly by the Company to
the Indemnitee, or on his behalf, pursuant to the terms of the
Indemnification Agreement made this same day between the parties,
the Indemnitee hereby undertakes and agrees to repay to the Company
any and all amounts so paid promptly and in any event within thirty
(30) days after the disposition, including any appeals, of any
litigation or threatened litigation on account of which payments
were made, PROVIDED, HOWEVER, to the extent that the Indemnitee is
entitled to be indemnified under the terms of said Indemnification
Agreement, Section l45 of the General Corporation Law of the State
of Delaware, Article VIII of the by-laws of the Company, or other
applicable law, Indemnitee shall not be required to repay the
amounts as to which he is determined to be entitled to
indemnification.
2. This Agreement shall not affect in any manner any rights which the
Indemnitee may have against the Company, any insurer, or any other
person to seek indemnification for or reimbursement of any expenses
referred to herein or any judgment which may be rendered in any
litigation or proceeding.
IN WITNESS WHEREOF, the Company has caused this Undertaking Agreement to
be duly executed on its behalf and the Indemnitee has duly executed this
Undertaking Agreement on the day and year first above written.
(CORPORATE SEAL) ACME METALS INCORPORATED
ATTEST:
By:
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Xxxxxx X. Xxxxx, Xx. Xxxxx X. X. Xxxxxxx
Secretary Chairman and Chief Executive Officer
INDEMNITEE:
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