Exhibit 10.11
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (this "Agreement"), is dated as of
November __, 2003, and is between GenTek Inc., a Delaware corporation (the
"Company"), and _______________ ("Indemnitee").
WHEREAS, on October 11, 2002, the Company and certain of its
subsidiaries and affiliates (collectively, the "Debtors") filed petitions for
relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court");
WHEREAS, on August 28, 2003, the Debtors filed their Joint Plan of
Reorganization under Chapter 00, Xxxxx 00, Xxxxxx Xxxxxx Code of GenTek Inc., et
al. and Noma Company, Debtors (as amended, supplemented or modified from time to
time, the "Plan");
WHEREAS, on October 7, 2003, the Bankruptcy Court entered an order
confirming the Plan;
WHEREAS, the Plan provides, among other things, that the Company will
enter into separate written agreements providing for the indemnification of each
person who is a director, officer or member of management of the Company as of
the Effective Date (as such term is defined in the Plan);
WHEREAS, Indemnitee is a director, officer or member of management of
the Company; and
WHEREAS, the Company and Indemnitee desire to enter into this
Agreement to provide for the indemnification of Indemnitee, on the terms and
conditions contained herein, and to comply with the terms of the Plan.
NOW, THEREFORE, in consideration of the foregoing and of Indemnitee
continuing to serve the Company directly or, at the Company's request, another
entity, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Certain Definitions:
(a) Change in Control: shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Act")), other
than a trustee or other fiduciary holding securities under an em-
ployee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company
representing 35% or more of the total voting power represented by the
Company's then outstanding Voting Securities, or (ii) during any
period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company (the
"Board") and any new director whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) 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 majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 50% of the total voting
power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of
transactions) all or substantially all the Company's assets.
(b) Claim: any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether instituted by the
Company or any other party, that Indemnitee in good faith believes
might lead to the institution of any such action, suit or proceeding,
whether civil, criminal, administrative, investigative or other.
(c) Expenses: include attorneys' fees and all other costs, expenses and
obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on
appeal), or preparing to defend, be a witness in or participate in,
any Claim relating to any Indemnifiable Event.
2
(d) Indemnifiable Event: any event or occurrence related to the fact that
Indemnitee is or was a director, officer, member of management,
employee, agent or fiduciary of the Company, or is or was serving at
the written request of the Company as a director, officer, member of
management, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust
or other entity, or by reason of anything done or not done by
Indemnitee in any such capacity.
(e) Independent Legal Counsel: an attorney or firm of attorneys, selected
in accordance with the provisions of Section 3, who shall not have
otherwise performed services for the Company or Indemnitee within the
last two years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other indemnitees
under similar indemnity agreements).
(f) Reviewing Party: any appropriate person or body consisting of a member
or members of the Board or any other person or body appointed by the
Board who is not a party to the particular Claim for which Indemnitee
is seeking indemnification, or Independent Legal Counsel.
(g) Voting Securities: any securities of the Company which vote generally
in the election of directors.
2. Basic Indemnification Arrangement. (a) In the event Indemnitee was, is
or becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law as soon as practicable but in
any event no later than sixty (60) days after written demand is presented to the
Company, against any and all Expenses, judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of such Expenses, judgments, fines,
penalties or amounts paid in settlement) of such Claim; provided, however, that
(i) except for proceedings to enforce rights to indemnification, the Company
shall not be obligated to indemnify Indemnitee (or Indemnitee's heirs,
executors, administrators or personal representatives) in connection with a
proceeding (or part thereof) initiated by such person unless such proceeding (or
part thereof) was authorized or consented to by the Board and (ii) to the extent
permitted by law, no indemnification shall be made with respect to Indemnitee's
conduct prior to the Effective Date if such conduct is finally adjudicated by
a court of law of competent jurisdiction to have involved willful misconduct or
gross negligence.
3
(b) Subject to such bonds or other provisions for securing repayment,
if any, as may be determined to be appropriate by (i) the Board, (ii) if more
than half of the members of the Board are involved in a Claim, by a majority
vote of a committee of one or more members of the Board who are not parities to
such Claim, even if less than a quorum or (iii) if directed by the Board, by
Independent Legal Counsel in a written opinion, if so requested by Indemnitee,
the Company shall advance (within five (5) business days of such request) any
and all Expenses to Indemnitee (an "Expense Advance").
(c) Notwithstanding anything in this Section 2 to the contrary, (i)
the obligations of the Company under Section 2(a) hereof shall be subject to the
condition that the Reviewing Party shall not have determined that Indemnitee
would not be permitted to be entitled to indemnification under this Agreement,
and (ii) the obligation of the Company to make an Expense Advance pursuant to
Section 2(b) hereof shall be subject to the condition that the Company shall
have received an undertaking from Indemnitee to reimburse the Company (and
Indemnitee hereby agrees to reimburse the Company) for all such amounts
theretofore paid if, when and to the extent that Indemnitee shall be adjudicated
or determined not to be entitled to indemnification under this Agreement;
provided, however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee should be indemnified under this Agreement, any determination
made by the Reviewing Party that Indemnitee would not be entitled to be
indemnified under this Agreement shall not be binding and Indemnitee shall not
be required to reimburse the Company for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed). If there has not been a Change
in Control, the Reviewing Party shall be selected by the Board, and if there has
been a Change in Control, the Reviewing Party shall be the Independent Legal
Counsel referred to in Section 3 hereof. If there has been no determination by
the Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be entitled to be indemnified in whole or in part under
this Agreement, Indemnitee shall have the right to commence litigation in any
court having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.
3. Change in Control. The Company agrees that if there is a Change in
Control of the Company then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and Expense Advances
4
under this Agreement or any other agreement, provision of the Company's
Certificate of Incorporation or provision of the Company's By-laws now or
hereafter in effect relating to Claims for Indemnifiable Events, the Company
shall seek legal advice only from Independent Legal Counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified under this Agreement. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to
indemnify fully such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
4. Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all reasonable expenses (including attorneys' fees)
and, if requested by Indemnitee, shall (within five (5) business days of such
request) advance such expenses to Indemnitee, which are incurred by Indemnitee
in connection with any action brought in good faith by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement, provision of the Company's Certificate of
Incorporation or provision of the Company's By-laws now or hereafter in effect
relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the Company,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be.
5. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including
5
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
6. Burden of Proof. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
7. No Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination as to
whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief,
prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified under this
Agreement shall be a defense to Indemnitee's claim or create a presumption that
Indemnitee has not met any particular standard of conduct or did not have any
particular belief.
8. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall not be
exclusive of any right which Indemnitee may have or hereafter acquire under any
statute, provision of the Company's Certificate of Incorporation, provision of
the Company's By-laws, agreement, vote of stockholders or disinterested
directors or otherwise; provided, however, that in the event any provision of
this Agreement in any respect conflicts with the terms of the Company's
Certificate of Incorporation or By-laws or any other agreement between the
Company or any of its subsidiaries and Indemnitee, then the provision which is
more favorable to Indemnitee shall govern.
9. Liability Insurance. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance and
Indemnitee is an officer or director of the Company or a subsidiary of the
Company, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms.
10. Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be
6
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
11. Subrogation. In the event of 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 shall take all
reasonable actions (at the Company's expense) to secure such rights, including
the execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.
12. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, By-law or otherwise) of the amounts otherwise indemnifiable
hereunder.
13. Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer, director or member of management of
the Company or of any other entity at the Company's request.
14. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable in any respect, and
the validity and enforceability of any such provision in every other respect and
of the remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
[The remainder of this page is intentionally left blank.]
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and date first written above.
GENTEK INC.
By
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
------------------------------
8
