EXHIBIT 10.12
FORM OF INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of September 17, 2002 by
and between Kronos International, Inc., a Delaware corporation (the "Company"),
and the undersigned, a director, officer, employee, or agent of the Company, or
a person serving at the request of the Company as a director, officer, employee,
agent or fiduciary of another corporation, partnership, joint venture, trust
employee benefit plan or other enterprise ("Indemnitee").
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation;
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the Company or business enterprise itself. The Amended and
Restated Bylaws of the Company (the "Bylaws") require indemnification of the
officers and directors of the Company. Indemnitee may also be entitled to
indemnification pursuant to the General Corporation Law of the State of Delaware
("DGCL"). The Bylaws and the DGCL expressly provide that the indemnification
provisions set forth therein are not exclusive, and thereby contemplate that
contracts may be entered into between the Company and members of the board of
directors, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and retaining such
persons;
WHEREAS, the Board has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the best interests of
the Company's stockholders and that the Company should act to assure such
persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, and to advance expenses on behalf
of, such persons to the fullest extent permitted by applicable law so that they
will serve or continue to serve the Company free from undue concern that they
will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws
of the Company and any resolutions adopted pursuant thereto, and shall not be
deemed a substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder;
WHEREAS, Indemnitee does not regard the protection available under the
Company's Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve and continue to serve as an officer or director without
adequate protection, and the Company desires Indemnitee to serve in such
capacity. Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he be
so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
Section 1. Services to the Company. Indemnitee agrees to serve as a
director, officer, employee, or agent of the Company, or at the request of the
Company, as a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust employee benefit plan or other
enterprise. Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position. This Agreement shall not
be deemed an employment contract between the Company (or any of its subsidiaries
or any Enterprise as defined below) and Indemnitee. Indemnitee specifically
acknowledges that Indemnitee's employment with the Company (or any of its
subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be
discharged at any time for any reason, with or without cause, except as may be
otherwise provided in any written employment contract between Indemnitee and the
Company (or any of its subsidiaries or any Enterprise), other applicable formal
severance policies duly adopted by the Board, or, with respect to service as a
director or officer of the Company, by the Company's Certificate of
Incorporation, the Bylaws, and the DGCL. The foregoing notwithstanding, this
Agreement shall continue in force after Indemnitee has ceased to serve as an
officer, director, agent, or employee of the Company.
Section 2. Definitions. As used in this Agreement:
(a) A "Change in Control" shall be deemed to occur upon the earliest
to occur after the date of this Agreement of any of the following events:
(i) Any Person (as defined below) is or becomes the Beneficial
Owner (as defined below), directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined voting power of
the Company's then outstanding securities;
(ii) During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in Sections 2(a)(i),
2(a)(iii) or 2(a)(iv)) whose election by the Board or nomination for election by
the Company's
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stockholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a least a majority of the members of the Board;
(iii) The effective date of a merger or consolidation of the
Company with any other entity, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 51% of the combined voting power of the voting securities of
the surviving entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the board of directors or
other governing body of such surviving entity;
(iv) The approval by the stockholders of the Company of a
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets; and
(v) There occurs any other event of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or a response to any similar item on any similar schedule or form)
promulgated under the Exchange Act (as defined below), whether or not the
Company is then subject to such reporting requirement.
(b) For purposes of this Agreement, the following terms shall have the
following meanings:
(A) "Beneficial Owner" shall have the meaning given to
such term in Rule 13d-3 under the Exchange Act; provided,
however, that Beneficial Owner shall exclude any Person
otherwise becoming a Beneficial Owner by reason of the
stockholders of the Company approving a merger of the
Company with another entity.
(B) "Corporate Status" describes the status of a person
who is or was a director, officer, employee or agent of the
Company or of any other corporation, partnership or joint
venture, trust, employee benefit plan or other enterprise
which such person is or was serving at the request of the
Company.
(C) "Disinterested Director" means a director of the
Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.
(D) "Enterprise" shall mean the Company and any other
corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise of which
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Indemnitee is or was serving at the request of the Company
as a director, officer, employee, agent or fiduciary.
(E) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(F) "Expenses" shall include all reasonable attorneys'
fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection
with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness
in, or otherwise participating in, a Proceeding. Expenses
also shall include Expenses incurred in connection with any
appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs
relating to any cost bond, supersedeas bond, or other appeal
bond or its equivalent. Expenses, however, shall not include
amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.
(G) "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
Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action
to determine Indemnitee's rights under this Agreement. The
Company agrees to pay the reasonable fees and expenses of
the Independent Counsel referred to above and to fully
indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
(H) "Person" shall have the meaning as set forth in
Sections 13(d) and 14(d) of the Exchange Act; provided,
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however, that Person shall exclude (i) the Company, (ii) any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
(I) The term "Proceeding" shall include any threatened,
pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or
completed proceeding, whether brought in the right of the
Company or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which Indemnitee
was, is or will be involved as a party or otherwise by
reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him
or of any action on his part while acting as director or
officer of the Company, or by reason of the fact that he is
or was serving at the request of the Company as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, in
each case whether or not serving in such capacity at the
time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses
can be provided under this Agreement; except one initiated
by a Indemnitee to enforce his rights under this Agreement.
(J) Reference to "other enterprise" shall include
employee benefit plans; references to "fines" shall include
any excise tax assessed with respect to any employee benefit
plan; references to "serving at the request of the Company"
shall include any service as a director, officer, employee
or agent of the Company which imposes duties on, or involves
services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a
manner he 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 manner "not opposed to
the best interests of the Company" as referred to in this
Agreement.
Section 3. Indemnity in Third-Party Proceedings. The Company shall
indemnify Indemnitee in accordance with the provisions of this Section 3 if
Indemnitee is, or is threatened to be made, a party to or a participant in any
Proceeding, other than a Proceeding by or in the right of the Company to procure
a judgment in its favor. Pursuant to this Xxxxxxx 0, Xxxxxxxxxx
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xxxxx xx indemnified against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee 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, in the case of a
criminal proceeding had no reasonable cause to believe that his conduct was
unlawful.
Section 4. Indemnity in Proceedings by or in the Right of the Company. The
Company shall indemnify Indemnitee in accordance with the provisions of this
Section 4 if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company. No
indemnification for Expenses shall be made under this Section 4 in respect of
any claim, issue or matter as to which Indemnitee shall have been finally
adjudged by a court to be liable to the Company, unless and only to the extent
that the Delaware Court of Chancery or any court in which the 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 indemnification.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provisions of this Agreement, to the
extent that Indemnitee is a party to (or a participant in) and is successful, on
the merits or otherwise, in any Proceeding or in defense of any claim, issue or
matter therein, in whole or in part, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter.
If the Indemnitee is not wholly successful in such Proceeding, the Company also
shall indemnify Indemnitee against all Expenses reasonably incurred in
connection with a claim, issue or matter related to any claim, issue, or matter
on which the Indemnitee was successful. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a successful
result as to such claim, issue or matter.
Section 6. Indemnification For Expenses of a Witness. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a witness in any Proceeding to which Indemnitee is not
a party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.
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Section 7. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company
shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee
is a party to or threatened to be made a party to any Proceeding (including a
Proceeding by or in the right of the Company to procure a judgment in its favor)
against all Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Sections 7(a), the meaning of the phrase "to the
fullest extent permitted by law" shall include, but not be limited to:
(i) to the fullest extent permitted by the provision of the DGCL
that authorizes or contemplates additional indemnification by agreement, or the
corresponding provision of any amendment to or replacement of the DGCL; and
(ii) to the fullest extent authorized or permitted by any
amendments to or replacements of the DGCL adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its
officers and directors.
Section 8. Exclusions. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount paid under any insurance policy or other
indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act, or similar provisions of state statutory
law or common law; or
(c) in connection with any Proceeding (or any part of any Proceeding)
initiated by Indemnitee, including any Proceeding (or any part of any
Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, unless (i) the Board of Directors of
the Company authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law.
Section 9. Advances of Expenses. Notwithstanding any provision of this
Agreement to the contrary, the Company shall advance the expenses incurred by
Indemnitee in connection with any Proceeding within thirty (30) days after the
receipt by the Company of a statement or statements requesting such advances
from time to time, whether prior to or after final disposition of any
Proceeding. Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee's ability to repay the expenses and without
regard to Indemnitee's ultimate entitlement to indemnification under the other
provisions of this Agreement. Advances shall include any and all reasonable
Expenses incurred pursuing an action to enforce this right of advancement,
including Expenses incurred preparing and forwarding statements to the Company
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to support the advances claimed. The Indemnitee shall qualify for advances upon
the execution and delivery to the Company of this Agreement which shall
constitute an undertaking providing that the Indemnitee undertakes to repay the
advance to the extent that it is ultimately determined that Indemnitee is not
entitled to be indemnified by the Company. This Section 9 shall not apply to any
claim made by Indemnitee for which indemnity is excluded pursuant to Section 8.
Section 10. Procedure for Notification and Defense of Claim.
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification, not later than thirty (30) days after receipt by
Indemnitee of notice of the commencement of any Proceeding. The omission to
notify the Company will not relieve the Company from any liability which it may
have to Indemnitee otherwise than under this Agreement. The Secretary of the
Company shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested indemnification.
(b) The Company will be entitled to participate in the Proceeding at
its own expense.
Section 11. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to
the first sentence of Section 10(a), a determination, if required by applicable
law, with respect to Indemnitee's entitlement thereto shall be made in the
specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred,
(A) by a majority vote of the Disinterested Directors, even though less than a
quorum of the Board, (B) by a committee of Disinterested Directors designated by
a majority vote of the Disinterested Directors, even though less than a quorum
of the Board, (C) if there are no such Disinterested Directors or, if such
Disinterested Directors so direct, by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to Indemnitee or (D) if so
directed by the Board, by the stockholders of the Company; and, if it is so
determined that Indemnitee is entitled to indemnification, payment to Indemnitee
shall be made within ten (10) days after such determination. Indemnitee shall
cooperate with the person, persons or entity making such determination with
respect to Indemnitee's entitlement to indemnification, including providing to
such person, persons or entity 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. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be bore by the Company (irrespective
of the determination as to Indemnitee's entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
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(b) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 11(a) hereof, the
Independent Counsel shall be selected as provided in this Section 11(b). If a
Change in Control shall not have occurred, 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 Independent Counsel so selected.
If a Change in Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board of Directors, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event, Indemnitee
or the Company, as the case may be, may, within 10 days after such written
notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case maybe, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of "Independent
Counsel" as defined in Section 2 of this Agreement, and the objection shall set
forth with particularity the factual basis of such assertion. Absent a proper
and timely objection, the person so selected shall act as Independent Counsel.
If such written objection is so made and substantiated, 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. If,
within twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 10(a) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may
petition a court of competent jurisdiction 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 with respect to whom all objections are so resolved or
the person so appointed shall act as Independent Counsel under Section 11(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section 13(a) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).
Section 12. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.
Neither the failure of the Company (including by its directors or independent
legal counsel) to have made a determination prior to the commencement of any
action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Company (including by its directors or
independent legal counsel) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
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(b) If the person, persons or entity empowered or selected under
Section 11 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within sixty (60) days after
receipt by the Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a
reasonable time, not to exceed an additional thirty (30) days, if the person,
persons or entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining or
evaluating of documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 12(b) shall not apply (i)
if the determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 11(a) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination the Board of Directors has resolved to submit such determination
to the stockholders for their consideration at an annual meeting thereof to be
held within seventy-five (75) days after such receipt and such determination is
made thereat, or (B) a special meeting of stockholders is called within fifteen
(15) days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so
called and such determination is made thereat, or (ii) if the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 11(a) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that 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 the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. For purposes of any determination of good
faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's
action is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made to
the Enterprise by an independent certified public accountant or by an appraiser
or other expert selected with the reasonable care by the Enterprise. The
provisions of this Section 12(d) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed to have
met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to
act, of any director, officer, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.
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Section 13. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section
11 of this Agreement that Indemnitee is not entitled to indemnification under
this Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 9 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 11 (a) of this
Agreement within forty-five (45) days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 5 or 6 or the last sentence of Section 11(a) of this
Agreement within ten (10) days after receipt by the Company of a written request
therefor, or (v) payment of indemnification pursuant to Section 3, 4 or 7 of
this Agreement is not made within ten (10) days after a determination has been
made that Indemnitee is entitled to indemnification, Indemnitee shall be
entitled to an adjudication by a court of his entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this
Section 13(a); provided, however, that the foregoing clause shall not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 5 of this Agreement. The Company shall not oppose Indemnitee's right to
seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 11(a) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 13 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 13 the Company shall have the burden of proving
Indemnitee is not entitled to indemnification or advancement of Expenses, as the
case may be.
(c) If a determination shall have been made pursuant to Section 11(a)
of this Agreement that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 13, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 13 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement. The Company
shall indemnify Indemnitee against any and all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after receipt by the Company of a
written request therefore) advance such expenses to Indemnitee, which are
incurred by Indemnitee in connection with any action brought by Indemnitee for
indemnification or advance of Expenses from the Company under this Agreement or
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, advancement of Expenses or insurance recovery,
as the case may be.
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Section 14. Non-exclusivity; Survival of Rights: Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Company's Certificate of Incorporation, the Company's Bylaws, any
agreement, a vote of stockholders or a resolution of directors, or otherwise. No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal. To the extent that a change in Delaware
law, whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Company's
Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or
policies. If, at the time of the receipt of a notice of a claim pursuant to the
terms hereof, the Company has director and officer liability insurance in
effect, the Company 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 Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of
such policies.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable (or for which advancement is provided
hereunder) hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or
otherwise.
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(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, employee or agent of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise shall be reduced
by any amount Indemnitee has actually received as indemnification or advancement
of expenses from such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise.
Section 15. Duration of Agreement. This Agreement shall continue until and
terminate upon the later of (a) ten (10) years after the date that Indemnitee
shall have ceased to serve as a director, officer, employee, or agent of the
Company, or at the request of the Company, as a director, officer, employee,
agent or fiduciary of another corporation, partnership, joint venture, trust
employee benefit plan or other enterprise or (b) one (1) year after the final
termination of any Proceeding then pending in respect of which Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder and of
any proceeding commenced by Indemnitee pursuant to Section 13 of this Agreement
relating thereto. This Agreement shall be binding upon the Company and its
successors and assigns and shall. inure to the benefit of Indemnitee and his
heirs, executors and administrators.
Section 16. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to give
the maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.
Section 17. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve and continue to serve as a director or officer of the
Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director or officer of the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
Section 18. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
parties thereto. No waiver of
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any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions of this Agreement nor shall any waiver constitute
a continuing waiver.
Section 19. Notice by Indemnitee. Indemnitee agrees promptly to, notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to the Indemnitee under
this Agreement or otherwise.
Section 20. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) if delivered by hand and receipted for by the party to
whom said notice or other communication shall have been directed, or (b) mailed
by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
(a) If to Indemnitee, at the address indicated on the signature page
of this Agreement, or such other address as Indemnitee shall provide to the
Company.
(b) If to the Company to
Kronos International, Inc.
00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
or to any other address as may have been furnished to Indemnitee by the Company.
Section 21. Contribution. To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).
Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and
the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 10(a) of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Chancery Court of the State of Delaware (the "Delaware Court"), and
not in any other state or federal court in the United States of America or any
court in any other country, (ii)
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consent to submit to the exclusive jurisdiction of the Delaware Court for
purposes of any action or proceeding arising out of or in connection with this
Agreement, (iii) waive any objection to the laying of venue of any such action
or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or
to make, any claim that any such action or proceeding brought in the Delaware
Court has been brought in an improper or inconvenient forum.
Section 23. Identical Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
Section 24. Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the day and year first above written.
KRONOS INTERNATIONAL, INC. INDEMNITEE
By:
------------------------------ -----------------------------------
Name: Name:
Title: Address:
